EchoStar has emerged as one of the leading plays on SpaceX since the company got a 2%-plus stake in Elon Musk's company in return for some of EchoStar's spectrum.
Wall Street excitement is building over SpaceX's blockbuster IPO, with a filing expected as early as this week and a pricing that could total $75 billion or more. The IPO could value SpaceX at $1.5 trillion to $2 trillion, making it one of the more valuable companies in the world. The deal could be priced by the end of June.
EchoStar stock has doubled since the initial spectrum deal in September and finished Monday at $136.45, down 0.5% on the session.
TD Cowen analyst Gregory Williams writes there could be more upside to EchoStar. He upped his price target on EchoStar to $155 from $129 a share in a client note Sunday and maintained his Buy recommendation.
Barron's estimates EchoStar holds about 525 million SpaceX shares. It sold the spectrum to SpaceX for about $11.1 billion of SpaceX stock valued at $212 a share.
At that time in late 2025, SpaceX was valued at closer to $450 billion assuming more than two billion shares outstanding. The SpaceX share count has risen with the company's purchase of Musk-controlled xAI for $250 billion earlier this year.
There is limited Wall Street coverage of EchoStar because some analysts work for firms involved in the SpaceX IPO underwriting and aren't publishing reports until after the offering is priced.
In his client note, Williams valued EchoStar at $155 a share on a sum-of-the-parts basis.
His assumptions appear conservative -- at least against an enthusiastic backdrop for the SpaceX IPO. He's assuming a $1.75 trillion valuation for SpaceX and is reducing value of the EchoStar stake in the company for taxes. He's also assigning a 10% discount to all of EchoStar's assets in his sum-of-the-parts model -- reflecting a conglomerate-type discount.
Williams values EchoStar's SpaceX equity stake at around $31 billion. We estimate that value equates to about $600 a share. Recent SpaceX transactions in the private market reportedly have been closer to $650 a share.
EchoStar isn't a pure play on SpaceX, complicating the story. It has cash and spectrum assets, even after spectrum sales to SpaceX and a separate deal for $23 billion in cash to AT&T. It also has a satellite TV business and about $22 billion of debt. It has about 350 million shares outstanding.
EchoStar CEO, chairman, and controlling shareholder Charlie Ergen hasn't said a lot about the SpaceX stake lately. The company didn't hold a conference call after its recent first-quarter earnings report. In November, Ergen praised Musk and SpaceX on an earnings call and said he was happy with the SpaceX deal, calling the equity an "excellent investment."
Bloomberg reported last week SpaceX would do a five-for-one split prior to the IPO, which would put the share price closer to $100 a share. A lower IPO price is more palatable for some investors.
There are risks. Investors need to recognize EchoStar isn't a pure play on SpaceX and Ergen calls the shots at the company. If SpaceX stock unexpectedly falters, EchoStar could drop.
Yet based on the Williams analysis, there could be more potential appreciation in EchoStar, especially if SpaceX emerges with a valuation of $2 trillion or more. Interest in EchoStar stock could build as the IPO approaches and investors look for ways to play SpaceX.
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