EchoStar
EchoStar’s spectrum deal with SpaceX makes it an indirect play on Elon Musk’s rocket company, with analysts now valuing its stake in the billions. Echo Star Website

EchoStar could be worth at least $161 (£121) a share purely because of the SpaceX stock on its balance sheet, according to a fresh Wall Street valuation that casts the satellite firm as a backdoor route into the largest IPO in history.

New Street Research analyst David Barden lifted his price target on EchoStar (Nasdaq: SATS) this week after SpaceX completed its record-breaking listing, telling clients that owning the rocket maker's shares through EchoStar 'at these levels is an attractive proposition,' CNBC reported.

Barden valued EchoStar at $159 (£119) a share based on where SpaceX closed its first day of trading, climbing to $161 (£121) if SpaceX hits his $165 (£124) target. That higher figure sits roughly 37% above where EchoStar shares finished on Monday, near $117 (£88).

How a Bankruptcy Candidate Became a SpaceX Proxy

The connection traces back to September 2025, when Elon Musk's company agreed to buy wireless spectrum licences from EchoStar for about $17 billion (£12.8 billion).

SpaceX paid roughly $8.5 billion (£6.4 billion) in cash and the rest in its own Class A stock, handing EchoStar an equity slice of around 2% in the privately held giant. Reuters first detailed the deal, which SpaceX said was central to expanding Starlink's direct-to-cell network.

A year earlier, EchoStar had been weighing possible bankruptcy. It was carrying debt above $22 billion (£16.5 billion) and fighting the Federal Communications Commission over its 5G obligations. The spectrum sale cleaned up the balance sheet and tied its fortunes to Musk. Fortune later named EchoStar the strongest shareholder return on its Fortune 500 list, with the stock up more than 400% since the start of 2025.

EchoStar chairman Charlie Ergen has made his confidence plain. 'They've been the best company I've ever worked with in 45 years,' he said of SpaceX during an earnings presentation. 'I don't think any amount of valuation is probably crazy there.'

Charlie Ergen
EchoStar chairman Charlie Ergen, pictured speaking at an event, praised SpaceX after a spectrum deal gave his company a multibillion-pound stake in SpaceX. Wake Forest University Website

Why the Discount Has Analysts Interested

The pitch rests on a gap between what EchoStar owns and what the market is paying for it. The company is set to receive about 262 million SpaceX shares. At SpaceX's first-day close near $161 (£121), that holding alone is worth roughly $42.1 billion (£31.6 billion), rising to about $43.2 billion (£32.4 billion) at Barden's $165 (£124) target.

EchoStar's entire market value, by contrast, sits near $34 billion (£25.5 billion). The current share price, Barden noted, implies the SpaceX stake is being priced at just $86 (£65) per EchoStar share, roughly 46% below where SpaceX closed the previous Friday. SpaceX is public now and open to any investor, yet the same exposure bought through EchoStar costs far less than the open-market price. That gap is the backdoor.

Barden is not the only one turning bullish. TD Cowen raised its EchoStar target to $155 (£116) from $129 (£97) and kept a buy rating, while the broader analyst range now stretches toward the $161 mark.

The Risks Hiding Behind the Stake

The renewed attention follows SpaceX's arrival on public markets. The company priced its offering at $135 (£101) a share and closed its first session near $161 (£121), up about 19%, raising roughly $75 billion (£56.3 billion) and lifting its market value above $2 trillion (£1.5 trillion). It was the largest IPO ever, eclipsing Saudi Aramco's 2019 record. The stock then climbed about 20% on Monday and another 13% on Tuesday, pushing past Barden's $165 target within days of listing.

For investors shut out of the heavily oversubscribed deal, EchoStar offers a side door, though the trade is far from risk-free. Its core pay-TV and broadband businesses are shrinking, it posted a first-quarter net loss, and it recently deferred interest payments on subsidiary debt while warning about its ability to continue as a going concern.

Not every analyst is convinced, either. Some valuation models already flag EchoStar as pricing in heavy expectations, and CFRA opened coverage of SpaceX itself with a sell rating. The bull case from New Street and TD Cowen rests on that discount, which Barden values at $161 a share.

Disclaimer: This article is for general information only and does not constitute financial advice. Investing carries risk, including the possible loss of capital. Always do your own research or speak to a qualified financial adviser before making investment decisions.

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