Skip to Content
Stock Analyst Update

Strong Quarter Propels Dish

The no-moat firm is seeing a decline in its satellite segment, but is enjoying continued growth at the Sling OTT service.

Mentioned:

 DISH (DISH) posted a strong second quarter as revenue met consensus expectations and EBITDA came ahead of the Street projection. The company lost 156,000 net pay-TV subs in the quarter despite the continuing growth at the Sling OTT service. Sling now has 2.34 million subscribers, up from 1.8 a year ago. The satellite segment (Dish TV) ended the second quarter with 10.7.8 million subs, down from 11.5 million at the end of the same quarter in 2017. Our no-moat rating and our $51 fair value estimate for Dish are unchanged. 

Total revenue fell just over 5% year over year to $3.5 billion as the company continues to replace higher-revenue satellite customers with lower-revenue Sling ones. Dish remains disciplined about not chasing lower-profit customers with promotional pricing, helping to lower subscriber acquisition cost for the quarter to $763 per subscriber from $806 a year ago. Dish TV churn fell to 1.46% from 1.83% from the same quarter a year ago due in part to the higher quality subscriber base. We note that the firm’s new Dish TV specific churn rate continues to show strong quarterly improvement as the second quarter rate was the lowest of the past six quarters. Adjusted operating income margin expanded to 16.5%, up 150 basis points year over year as the lower costs from a smaller subscriber base more than offset increased content costs.

Morningstar Premium Members gain exclusive access to our full analyst reports, including fair value estimates, bull and bear breakdowns, and risk analyses. Not a Premium Member? Get this and other reports immediately when you try Morningstar Premium free for 14 days.

Neil Macker does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.