DISH Network (NASDAQ:DISH) rocketed higher following its Friday earnings report. The Englewood, Colorado-based satellite TV service shot higher on Friday and again on Monday as earnings and revenue beat expectations. With this report, the question becomes what will happen with DISH stock.

Although DISH could stabilize its business, the company still lacks a clear path for growing its profits.

DISH Stock Earnings Beat

Q2 earnings per share (EPS) came in at 83 cents. Wall Street had been looking for 71 cents per share. This also meant a vast improvement over the same quarter in 2017, when the company earned only nine cents per share.

Revenues also exceeded analyst estimates. The company brought in $3.46 billion. Though that represented a 4.9% drop from the same quarter last year, the number still came in $20 million higher than expected.

Also, the company lost 192,000 satellite subscribers. However, analysts predicted a loss of 235,000. The one disappointment came from Sling TV, its Internet-based TV subscription service. Sling added 41,000 subscribers during the quarter. However, Wall Street expected the company would add 68,000 subscribers to this service.

Despite the Sling numbers, Wall Street reacted unexpectedly well to the report. DISH stock rose by about 14.5% in Friday trading. Shares also saw a huge increase on Monday. Despite the mixed results, Wall Street sees this as a sign DISH’s business is stabilizing.

DISH Still Is Losing Customers

The cord-cutting trend inspired by Netflix (NASDAQ:NFLX) and other streaming services has hit DISH harder than other TV providers such as Comcast (NASDAQ:CMCSA) or AT&T (NYSE:T).

Comcast and AT&T also sell internet service, which mitigated some of the losses related to TV. Though DISH offers satellite internet service, this has proven itself a more expensive and less reliable option than fiber-based internet. As it stands now, satellite internet only makes sense for rural areas too isolated to support a fiber buildout.

This situation has profoundly hurt DISH stock. Since peaking at just under $80 per share in late 2014, it has experienced a steady downward trend. Even after the latest post-earnings uptrend, DISH trades at less than 50% of its 2014 high.

On the one hand, writing DISH off entirely is premature. The company will retain its rural businesses as few competitive options for those customers exist. They will also mitigate some of the subscriber loss with Sling TV. They also own spectrum ideal for 5G, which could provide the company with additional options.

Nonetheless, the numbers still indicate the profit shrinkage for DISH stock will continue. Analysts expect profits of $2.58 per share for 2018. However, they also expect profits to fall in each of the next three years. They predict profits will drop to $1.21 per share by 2021.

Spectrum Is Not a Solution for DISH Stock

Also, the spectrum may not save DISH. Gabelli analyst Chris Marangi, who takes a bullish position on DISH stock, admitted DISH would need up to $10 billion to build out the wireless network that could utilize the spectrum.

DISH does not have such funding. Also, given that DISH exists holding a market cap of $17 billion and a debt load of over $15.1 billion. In such a financial situation, funding a network buildout could prove difficult.

Moreover, for those who believe they can build a business based only on licensed spectrum, they need to look at the history of the now-defunct Clearwire Corp. Despite its extensive spectrum holdings, Clearwire failed to parlay their valuable spectrum into a profitable wireless service business.

In the end, they were forced to sell themselves and their spectrum to Sprint (NYSE:S), who is now trying to sell itself. Given Clearwire’s history and Sprint’s present condition, investors should remain wary of those who might say “this time, it’s different.”

The Bottom Line on DISH Stock

DISH stock has proved it can earn enough business to survive. Unfortunately for investors, its recovery offers no path to grow profitability. Although cord-cutting continues to hurt DISH, Sling TV has mitigated some of those losses. DISH will make money for the foreseeable future.

Analysts still see a future of diminished profits. Also, given its debt load, the strategy to save itself by utilizing the valuable spectrum it owns will likely prove too costly to implement. Given the lack of prospects to return to profit growth, investors should stay away from DISH stock.

As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting.