Dish Network (DISH) Last Update 8/8/22
Related: CMCSA T VZ
% of Stock Price
Revenue
Gross Profits
Free Cash Flow
Dish Network
STOCK PRICE
DIVISION
% of STOCK PRICE
Satellite TV
56.0%
$28.61
Wireless
44.0%
$22.49
Net Debt
55.6% $28.44
TOTAL
100%
$51.11
$27.20
Yours
Trefis Price
N/A
$15.20
Market
 
Top Drivers for Period
Key Drivers
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RECENT NEWS AND ANALYSIS

Potential upside & downside to trefis price

Dish Network Company

VALUATION HIGHLIGHTS

  1. Satellite TV constitutes 56% of the Trefis price estimate for Dish Network's stock.
  2. Wireless constitute 44% of the Trefis price estimate for Dish Network's stock.

WHAT HAS CHANGED?

  1. Dish's Q2 2022 Earnings

Dish posted a mixed set of Q2 2022 results, which missed analyst estimates on revenue, but beat on earnings. Dish’s revenues for the quarter declined by almost 6% year-over-year to around $4.2 billion, while earnings per share fell to $0.82, down from $1.06 a year ago. Dish lost about 257,000 pay-TV subscribers, taking its total pay-TV base to just under 10 million. Retail wireless subscribers declined by approximately 210,000 over the quarter.

  1. Wireless Acquisitions

Dish Network completed the acquisition of Boost Mobile in July 2020 while that of Ting Mobile was completed in August 2020. Dish also acquired Republic Wireless in 2021. The company had close to 9 million wireless subscribers at the end of 2021.

  1. Dish Set To Enter 5G Wireless Market

Dish Networks finally announced plans for entering the U.S. wireless market. In late July 2020, the company reached a deal with Sprint and T-Mobile (which are set to merge) to acquire Sprint’s prepaid businesses along with a portion of Sprint’s 800 MHz spectrum. The company will also gain full access to the merged entity's (New T-Mobile) wireless network for seven years, as it builds out its own wireless infrastructure. The company will leverage this deal, as well as its deep portfolio of wireless spectrum, to become the 4th U.S. wireless carrier. The company expects to reach 70% of the US population with 5G by the year 2023.

POTENTIAL UPSIDE & DOWNSIDE TO TREFIS PRICE

Below are key drivers of Dish Network's value that present opportunities for upside or downside to the current Trefis price estimate for Dish Network:

Satellite TV

  • Fee per Pay TV Subscriber: We estimate this figure will increase from about $100 in 2021 to about $130 by the end of our forecast period. However, there could be an upside of around 5% to our price estimate if this fee were to rise to more than $140 instead.
  • Dish Network Gross Profit Margin: We estimate that Dish Network's Pay TV gross margins will go down from almost 40% in 2021 to around 37% by the end of our forecast period. There could be an upside of more than 5% to our price estimate if Dish can get back to 42% gross margin levels seen in the late 2000s, by continuing to focus on a quality subscriber base and increasing its prices.

For additional details, select a driver above or select a division from the interactive Trefis split for Dish Network at the top of the page.

BUSINESS SUMMARY

Dish Network is one of the largest pay-TV providers in the U.S. The pay-TV market includes cable providers such as Comcast, satellite providers such as DirecTV and telecom providers such as AT&T and Verizon, that offer fiber optic TV services. Dish is the second-largest satellite TV provider in the U.S. after DirecTV. Dish makes money by charging digital TV subscription fees to customers, selling digital TV boxes, selling premium services like HD and DVR, and by charging advertisers to advertise on some of the channels it carries.

Dish is also an emerging wireless player. Dish invested over $20 billion to acquire wireless spectrum licenses including AWS-4, AWS-3, and licences in the 600 Mhz bands. The company also entered the retail wireless market in 2020, via its acquisition of Boost Mobile, which operates as a mobile virtual network operator. Dish is also building out its own 5G network, as it needs to meet the FCC guidelines of reaching 70% of the U.S. population with its spectrum.

SOURCES OF VALUE

The majority of Dish's value still comes from its satellite TV service, per our estimates. This is due to the division's high average revenue per subscriber, which stood at $100 in 2021. We estimate that the average revenue per subscriber will grow to over $130 by the end of our forecast period. Margins for the division are also quite high, at 39% in 2021.

KEY TRENDS

Dish's wireless plans

Dish has made significant investments in the spectrum over the past few years and is now one of the largest holders of wireless spectrum in the United States. The company has spent a combined sum of over $20 billion in acquiring its spectrum and is in the process of building out a 5G network, with plans to invest over $10 billion in the next few years. While Dish's 5G network will also serve retail users, the enterprise space is likely to be a key market. Dish is focusing on building a cloud-native network, that could allow it to provide virtually partitioned slices of its network that are designed to the exacting needs of industrial users.

Dish's valuable spectrum assets

Dish’s spectrum assets could provide investors with downside protection even if Dish’s wireless buildout and monetization don’t go as well as planned. The company holds around 150 MHz of value sub-6 GHz frequency, compared to Verizon and AT&T which hold around 290 MHz each, per UBS. Although there are regulations that prevent existing wireless carriers from buying Dish’s spectrum assets before 2026, the spectrum is nevertheless increasingly valuable given the growing demand for bandwidth following Covid-19, the higher spectrum intensity of 5G versus earlier technologies, and also due to the limited availability of airwaves.

Threat from streaming platforms

Dish Network and pay-TV service providers, in general, face a threat from emerging online video platforms such as Netflix and Hulu. Although these platforms mostly provide content that is not running live on TV, they are now slowly penetrating the pay-TV provider's core turf. Netflix's successful entry into original programming is an example.