Potential 18% Upside to Dish’s Stock from Higher Pay TV Share, Subscriber Fees
Dish Network (NASDAQ:DISH) is the second largest pay-TV provider in the US after satellite rival DirecTV (NASDAQ:DTV). It also competes with AT&T (NYSE:T), Comcast (NASDAQ:CMCSA), Time Warner Cable (NYSE:TWC), and Verizon (NYSE:VZ) in the broader pay-TV market. We currently have a Trefis price estimate of $27 for Dish Network’s stock, about 32% above the current market price of $20.
Trefis members have created forecasts for two key drivers of Dish Network’s (NASDAQ:DISH) stock over the last week: (1) Dish Network Pay TV Market Share and (2) Fee per Dish Satellite TV Subscriber. The members’ forecast suggest that Dish Network Pay TV Market Share and Fee per Dish Satellite TV Subscriber will trend above the Trefis forecast. Their projections indicate a combined upside of around 18% for our estimate for Dish’s stock.
We estimate Satellite TV constitutes 69% of the $27 Trefis price estimate for Dish’s stock, and hence the stock is quite sensitive to (1) Dish Network Pay TV Market Share and (2) Fee per Dish Satellite TV Subscriber. Below are charts showing recent estimates created by Trefis members for the two drivers in detail.
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1. Dish Network Pay TV Market Share
The average of forecasts for Dish Network Pay TV Market Share created by Trefis members indicated a projected increase from 14.7% in 2010 to 15.2% by the end of the Trefis forecast period. In comparison, we expect the market share to remain in the 13%-13.5% range over the Trefis forecast period. The member estimates imply an upside of 15% to the Trefis price estimate for Dish Network’s stock. In the past, Dish Network Pay TV Market Share has increased from 12.7% in 2006 to 13.3% in 2009.
You can drag the forecast trend-line above to express your own view, and see the sensitivity of Dish Network’s stock to Dish Network Pay TV Market Share.
Our complete analysis for Dish Network Pay TV Market Share is here.
2. Fee per Dish Satellite TV Subscriber
The average of forecasts for Fee per Dish Satellite TV Subscriber created by Trefis members indicated a slight projected decrease from $56.90 per month in 2010 to $56.50 per month by the end of the Trefis forecast period, compared to the baseline Trefis estimate of a slightly bigger decrease from $55.90 per month in 2010 to $54.80 per month by the end of the Trefis forecast period. The member estimates imply an upside of 3% to the Trefis price estimate for Dish Network’s stock. In the past, Fee per Dish Satellite TV Subscriber has increased from $53.40 per month in 2006 to $54.30 per month in 2009.
You can drag the forecast trend-line above to express your own view, and see the sensitivity of Dish Network’s stock to Fee per Dish Satellite TV Subscriber.