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Is it safe to buy DISH Network stock amid falling subscribers?

By:
on Nov 4, 2021
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  • DISH Network shares on Thursday fell by 1.50% after reporting FQ3 results.
  • The company announced its most recent quarterly results before markets opened, missing earnings estimates.
  • DISH subscribers continued to decline in Pay-TV and Wireless.

On Thursday, DISH Network Corp (NASDAQ:DISH) shares edged lower 1.50% after reporting its fiscal third-quarter results. The company announced its most recent quarterly results before markets opened, missing analyst expectations on earnings. On the other hand, its revenue for the period was in line with estimates. The company also said subscriber decline continued from across Pay-TV and Wireless divisions.

DISH posted FQ3 GAAP earnings per share of $0.88, missing the average for analyst estimates of $0.91. On the other hand, revenue for the quarter of $.45 billion was in line with estimates despite falling by 1.8% from the same quarter in 2020.

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The company said Pay-TV subscribers decreased by 13,000 compared to 116,000 in Q3, 2020. The company also lost 121,000 wireless net subscribers during the quarter compared to 212,000 in the same quarter a year ago.

The stock continues to trade in a choppy pattern formation, swinging to a net gain of 1.50% this year whilst falling 1.90% over the last 12 months.

Is it safe to buy DISH shares?

From an investment perspective, DISH Network shares trade at a compelling valuation multiple of 16.41 P/E, whilst paying dividends at an attractive yield of 3.72%. Therefore, the stock could be an exciting option for both value and dividend investors.

On the other hand, with analysts expecting its earnings per share to decline by nearly 20% next year, wiping out this year’s projected increase of 15.90%, growth investors could opt for alternatives in the market.

Moreover, with subscriber numbers falling, the current valuation multiples may be factoring in the risk associated with potential revenue decline.

Source – TradingView

Technically, DISH Network shares seem to have recently plunged to complete a downward breakout from an ascending channel formation. As a result, the stock has fallen closer to the oversold conditions of the 14-day RSI.

Therefore, investors could target short-term rebound profits at about $39.27, or higher at $42.76, while $35.05 and $31.87 are crucial support zones.

A rebound seems imminent 

In summary, given DISH Network’s compelling valuation multiples and attractive dividend yield, the recent pullback presents a technical opportunity to buy ahead of a rebound.