J.P. Morgan Says EchoStar Is a Quiet Bet on SpaceX

Investors may be overlooking two things that could matter more for EchoStar than its day-to-day telecom business, according to a new note from J.P. Morgan. The bank's analyst argues that the market is not giving the company enough credit for its future stake in SpaceX, or for its ability to keep dealing its wireless spectrum to larger buyers.

The core of the argument is that EchoStar's shares have traded as if the company were mainly a satellite and wireless operator, when a meaningful part of its value now rests on an equity position in Elon Musk's rocket and satellite company. Because that stake is tied to SpaceX rather than to EchoStar's own operations, buying the stock is a more indirect way to own part of SpaceX, which is still privately held and difficult for ordinary investors to access. The analyst's view is that this link has not been priced in fully.

The second point concerns spectrum. EchoStar holds radio frequency licenses that have become valuable as carriers and satellite firms look for airwaves to support direct-to-device connectivity. The note suggests that the company could still find buyers or partners for those licenses, and that another deal of that kind would add to a valuation that the analyst considers conservative.

The report does not present these as guaranteed outcomes. Any gain from the SpaceX stake depends on how and when that holding is valued, and spectrum sales depend on regulators, competing bidders and the terms each buyer is willing to accept. Investors weighing the stock would also need to consider EchoStar's debt, its existing operating business and the general volatility of companies whose value is tied to a single large private holding.

Still, the note adds to a growing discussion among analysts about whether EchoStar should be treated as a holding company with hidden assets rather than a conventional telecom. If J.P. Morgan is right, the gap between the share price and the value of those assets could narrow as the SpaceX stake becomes clearer and as new spectrum transactions are announced.