EchoStar (SATS) Surges 4.9%: Is This an Indication of Further Gains?

EchoStar (SATS) shares ended the last trading session 4.9% higher at $116.06. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 25.4% gain over the past four weeks.

The increase in share price can be attributed to multiple demand and policy tailwinds converging at the same time, making satellite infrastructure strategically and commercially critical. Rising geopolitical turmoil (recent Venezuela-US tension) are pushing countries to invest heavily in secure satellite communications, ISR (intelligence, surveillance, reconnaissance), and GPS resilience, directly benefiting satellite operators.

EchoStar is benefiting from the accelerating demand for satellite-based connectivity as LEO and hybrid satellite architectures gain traction and enterprises seek dependable networks to support cloud adoption, digital transformation and remote operations. Rising needs for broadband access in rural markets, government programs aimed at bridging the digital divide and expanding mobility applications are creating tailwinds for its Hughes segment.

This seller of set-top boxes and provider of satellite services to Dish Network is expected to post quarterly loss of $0.81 per share in its upcoming report, which represents a year-over-year change of -165.3%. Revenues are expected to be $3.74 billion, down 5.7% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For EchoStar, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on SATS going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

EchoStar is part of the Zacks Satellite and Communication industry. Iridium Communications (IRDM), another stock in the same industry, closed the last trading session 2.1% higher at $18.48. IRDM has returned 1.7% in the past month.

Iridium's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.24. Compared to the company's year-ago EPS, this represents a change of -22.6%. Iridium currently boasts a Zacks Rank of #4 (Sell).

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This article originally published on Zacks Investment Research (zacks.com).

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