EchoStar (SATS) Stock: SpaceX IPO Rumors Send Shares Soaring

TLDR

• EchoStar stock jumped 6% to $93.54 after Bloomberg reported SpaceX may pursue an IPO in 2026
• EchoStar owns $8.5 billion in SpaceX stock from a September deal where it sold wireless spectrum licenses to SpaceX
• Morgan Stanley upgraded EchoStar to Overweight with a $110 price target, citing valuable remaining AWS-3 spectrum holdings
• SpaceX valuation reports have driven EchoStar up 20% in December and 308% year-to-date
• New Street Research raised its EchoStar price target to $125 from $100 following SpaceX’s reported $800 billion valuation

EchoStar shares climbed $10 in late trading Tuesday, closing at $93.54. The 6% jump came after Bloomberg reported SpaceX might launch an IPO in 2026.

EchoStar Corporation, SATS

The connection between these two companies runs deep. In September, EchoStar struck a deal to sell wireless spectrum licenses to SpaceX. In return, EchoStar received $8.5 billion worth of SpaceX stock.

That deal has turned EchoStar into a proxy for SpaceX’s private valuation. When SpaceX’s value rises, EchoStar’s stock follows.

The rocket company was valued at $400 billion when the spectrum deal closed. Since then, reports suggest SpaceX is seeking an $800 billion valuation. Elon Musk downplayed the fundraising talk, noting SpaceX is already cash-flow positive.

Still, investors are betting on SpaceX’s continued growth. EchoStar stock has surged 20% in December alone. Year-to-date, shares are up 308%.

Wall Street analysts are taking notice. New Street Research analyst David Barden boosted his price target to $125 from $100. He pointed to SpaceX’s rising valuation and changing spectrum deployment rules that could increase the value of EchoStar’s remaining holdings.

That $25 price target increase translates to roughly $9 billion in added market value. EchoStar has about 353 million fully diluted shares outstanding.

Morgan Stanley Sees More Upside

Morgan Stanley upgraded EchoStar from Equalweight to Overweight on Wednesday. The firm set a new price target of $110, up from $82.

The bank highlighted EchoStar’s position as a spectrum seller. The company still holds paired AWS-3 spectrum that both Verizon and T-Mobile want.

Morgan Stanley called spectrum “an appreciating asset.” The firm expects carriers to compete aggressively for EchoStar’s remaining holdings.

The average analyst price target has climbed $43 since September. It now sits at $93, matching Tuesday’s closing price.

EchoStar’s market cap stands at $26.93 billion. That’s still below its 2014 peak when the AWS-3 spectrum auction took place.

Valuation Questions Remain

Some math doesn’t quite add up. Wall Street’s price targets have risen faster than the stock itself. Analysts have added $43 to their targets since September. The stock has gained only $32 in that time.

That leaves about $11 per share of theoretical upside unaccounted for. Price targets and actual prices don’t always match on any given day. But the gap shows how quickly EchoStar’s outlook has shifted.

Another way to slice the numbers: EchoStar’s total enterprise value, excluding its SpaceX stake, has actually declined. After the September deal, the market valued EchoStar’s core business at $40 billion. Now it’s closer to $36 billion.

The decline seems odd given the optimism around spectrum values. But this situation is unique. Few companies hold billions in stock from the world’s most valuable private aerospace firm.

Morgan Stanley’s bull case values EchoStar at $120 per share. That scenario assumes the AWS-3 spectrum sells for $3 per MHz pop and the company manages its tax liabilities well. The firm values EchoStar’s SpaceX equity at roughly $40 per share.

EchoStar recently missed earnings expectations for Q3. The company posted a loss of $44.37 per share versus expectations of $1.21. Revenue came in at $3.61 billion against forecasts of $3.73 billion.

Despite the earnings miss, investors remain focused on the SpaceX connection and spectrum value. The stock trades just 5% below its 52-week high of $98.90.

The post EchoStar (SATS) Stock: SpaceX IPO Rumors Send Shares Soaring appeared first on CoinCentral.