Shares of Dish Network (DISH -0.96%) soared on Friday as analysts digested Thursday morning's earnings report. The satellite broadcaster and wireless network carrier's stock traded 10.8% higher at 1:40 p.m. ET, down from a peak gain of 11.4%.
Dish reported fourth-quarter results largely in line with analyst expectations. Revenues fell 2% year over year to $4.45 billion, and earnings backed down from $1.24 to $0.87 per diluted share. Dish lost 273,000 TV service subscribers during the quarter and exited the period with 8.2 million satellite customers plus 2.5 million Sling TV media-streaming clients.
The stock fell 5.5% at first but recovered to close out Thursday's trading session at a 6.8% gain. The bounce started during the earnings call, as CEO Erik Carlson said that the wireless business that Dish acquired from Sprint and T-Mobile (TMUS 0.21%) two years ago should "take off" this year. A 5G network with a cloud-based connectivity backbone is operational in Las Vegas, and Dish is rolling out similar solutions across other major cities.
Then, several analysts posted their analyses of this report early Friday morning. Several of them reduced their target prices on Dish's stock, but that didn't always point to a bearish attitude. The reduced target prices remained well above the stock's current prices in most cases. In particular, Wall Street heavyweight JPMorgan awarded Dish a double upgrade from underweight (expected to do poorly) to overweight (expected to perform well) while cutting their price target from $42 to $40 per share. That hefty upgrade provided the rocket engines behind Friday's price gains.
Like other analysts, JPMorgan sees value in Dish's conversion from satellite broadcasting to 5G networking. The Vegas market was highlighted as a significant benefit, and the expected launch of additional 5G coverage before June 2022 should add to that upside. Even though JPMorgan analyst Philip Cusick is "somewhat skeptical" that Dish can deliver a better or more cost-effective 5G experience than the other major network operators, the company's enormous portfolio of wireless spectrum licenses should provide a foundation for a solid, long-term business.
So in the light of that Q4 report, it looks like you can treat Dish as an increasingly pure bet on 5G wireless networks over the next few years. Meanwhile, the stock trades at just 7 times trailing earnings and 5.3 times free cash flows, making it far more affordable than T-Mobile and comparable to the other wireless heavyweights.