Morningstar ranks Dish Network (DISH) as a 5 star stock, the fair value for the stock is estimated at $30 per share. They do not do an analysis of SATS however. The following is the opinion of analyst Michael Hodel CFA of Morningstar on the Echostar spinoff
"We believe the recent decision to spin off EchoStar--the set-top box business and a handful of other assets--has also served as a distraction for DISH without providing much benefit. The television business theoretically could benefit from the ability to buy set-top boxes from other suppliers, but that seems unlikely with Ergen controlling both DISH and EchoStar. More than 80% of EchoStar's sales are from set-top boxes and other services provided to DISH. We also don't think the spin-off makes DISH a significantly more attractive acquisition target."
Regarding Dish Network's recent loss of subscribers, and keeping in mind that the loss of subscribers in all is not a plus, according to the analysis total subscriber related revenue which constitutes 99% of DISH's revenue increased 2% in the first quarter of 2009.
Operating costs held steady in the first quarter. Even though total subscriber retention costs increased by 7%, subscriber acquisition costs, advertising, and a shift from higher cost independent dealer sales to direct sales decreased by 22%, enabling total operating expenditures to stay even.
Also in response to the poster's comment about Echostar's revenue, approximately 80% of EchoStar (SATS) total revenue is applicable to Dish Network, so around 20% of their revenue is derived elsewhere. Just read this week's Multichannel satellite report by Scott, there you will find that Echostar is at the Independent Cable Operator's Summit in Grapevine, TX and they are pushing their Sling enabled cable box and are pondering licensing Sling technology to other set top box manufacturers.
Additionally, some analysts are not quite so bullish on DirecTV's stock. They feel that although DirecTV seems to have most ofthe momentum in adding DBS subscribers, that the rates which are used to attract these customers will end up hurting the company in the long run, in other words, when some of the teaser rates are over some new customers could suspend their service or defect to another service provider. Additionally, the AT&T deal, while a boon to DirecTV now, could prove to be a two edged sword, as AT&T expands their UVerse television service, they will be doing everything in their power to change customers from DirecTV to UVerse. A major roll out of Uverse has already began in Central Alabama, and AT&T is expanding UVerse at a rapid pace than in former Bell South territory. They have plans to expand the service to many parts of the 8 counties served by AT&T in Metro Birmingham in the near future
