Investors looking for indirect exposure to SpaceX (SPCX) may find an attractive entry point through EchoStar (NASDAQ: SATS), according to New Street Research senior analyst David Barden. In a recent note, Barden raised his price target on the telecommunications firm to $165, implying roughly 40% upside from its prior close. The call comes as SATS shares trade about 15% below their late-May year-to-date high.
SpaceX Stake Undervalued by Market
Barden's bullish thesis hinges on EchoStar's sizable holding in SpaceX. Following the sale of wireless spectrum to AT&T and SpaceX, EchoStar now owns approximately 262 million shares of Elon Musk's space and AI infrastructure giant. Based on SpaceX's closing price of $161 on its Nasdaq debut, that stake alone is worth over $42 billion. Yet, with SATS shares near $121, the market is effectively pricing SpaceX at just $86 per share—a steep discount. “We believe owning SpaceX stock via EchoStar at these levels is an attractive proposition,” Barden wrote.
This dynamic echoes similar situations where conglomerate discounts obscure hidden value. For context, SpaceX Stock Slips 2% as Lockup, Short Interest Weigh on Sentiment highlights near-term headwinds for the direct listing, but Barden argues the long-term opportunity through SATS remains compelling.
Core Telecom Business Still Solid
Beyond its SpaceX holdings, EchoStar maintains a robust telecommunications infrastructure that generates consistent cash flow. The company exited the first quarter with over 6 million pay-TV subscribers, including 4.8 million on Dish TV and 1.79 million on Sling TV, plus its Boost Mobile brand. However, Barden did adjust estimates for legacy assets amid ongoing FCC spectrum auctions. He trimmed the AWS-3 spectrum valuation to $3 per MHz-POP from $3.62, reducing the standalone business value from $10 billion to about $8.3 billion.
Options Market and Analyst Consensus Signal Upside
From a technical perspective, SATS stock appears poised to test its 20-day moving average. A decisive break above $124 could fuel near-term bullish momentum. The derivatives market also leans optimistic: the put-to-call ratio on options expiring mid-October stands at 0.24, indicating strong bullish skew. EchoStar trades at roughly 2.2x sales, making it relatively inexpensive.
Wall Street broadly agrees with Barden's constructive view. The consensus rating on SATS is “Moderate Buy,” with a mean price target of $143—suggesting nearly 20% upside from current levels. While not as aggressive as Barden's $165 target, the overall sentiment remains positive. For comparison, SpaceX Stock Drops 40% from Peak, Yet Analysts See 76% Rebound Potential underscores the volatility in SPCX shares, but the indirect route via EchoStar may offer a more stable entry.
Investors should weigh the risks of spectrum auction outcomes and subscriber trends, but the combination of a discounted SpaceX stake and a cash-flowing telecom business makes SATS a noteworthy consideration for those seeking exposure to Elon Musk's space venture.
This article is for informational purposes only and does not constitute financial advice.
