EchoStar (SATS) shares rallied 31.5% in the last trading session to close at $16.65. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 3.5% gain over the past four weeks.
The increase in share price can be attributed to a series of strategic moves made by the company to unlock additional strategic, financial and operating flexibility after completing the merger with DISH Network Corporation.
The strategic move involves the transfer of DISH Network’s wireless spectrum licenses and 3 million pay-TV subscribers to the newly formed subsidiary - EchoStar Wireless Holding. Also, the merger will likely help EchoStar to expand its footprint in the terrestrial and non-terrestrial wireless connectivity market.
This seller of set-top boxes and provider of satellite services to Dish Network is expected to post quarterly earnings of $0.21 per share in its upcoming report, which represents a year-over-year change of -64.4%. Revenues are expected to be $469 million, down 6.2% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with 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 a member of the Zacks Satellite and Communication industry. One other stock in the same industry, Iridium Communications (IRDM), finished the last trading session 0.5% higher at $39.12. IRDM has returned -1.6% over the past month.
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