A surprisingly resilient enterprise on balance, satellite television and mobile wireless services provider DISH Network (NASDAQ:DISH) incurred a reality check. Amid a soft session on Wall Street, DISH stock ended up tumbling over 7% on an analyst’s double downgrade. Coincidentally, the underlying company has also been struggling with an ongoing service outage.
Dominating headlines for DISH stock, Bank of America analyst David Barden issued a dour note on its underlying ambitions. The expert noted that shares could fall nearly 20% as the timeline for its wireless network development encountered unforeseen technological difficulties. As a result, it would not likely reach operational capacity until 2024.
“Over this same year, a once-exciting and seemingly-clear set of opportunities to leverage its 5G wireless infrastructure now feels further away, in our view,” stated Barden. Because of the major challenges getting the innovation moving forward, the analyst downgraded DISH stock to “underperform” from “buy.” Further, the analyst slashed the price target to $10 from $30 a share.
From Monday’s close, this implied an 18% downside. However, from the time of writing, the implied risk now sits at nearly 12% down.
If BofA’s assessment wasn’t bad enough, Goldman Sachs also put its hat into the ring. Analysts at the financial institution slashed their price target of DISH stock to $13 from $14.
Unfortunate Timing Clouds DISH Stock
When it rains, it pours, as DISH Network can attest. While DISH stock began receiving downgrades and price target reductions, management has been struggling with a service outage. Since Feb. 23, DISH Network’s websites and customer service phone lines have been down.
For its part, management describes the problem as an “internal system issue.” It’s continuing to investigate the cause of the outage. Still, if DISH can’t quickly solve an outage, Barden’s criticism of its 5G network ambitions appears right on the nose.
Not surprisingly, then, the bears smell blood in the water. Per Barchart’s screener for unusual stock options volume, options traders rushed into DISH stock. Against the current session volume and the trailing one-month average volume, the delta comes out to 146.77%. Moreover, put volume presently stands at 37,690 contracts, while call volume sits at 2,709.
Still, not all the data pointed toward a pessimistic profile of DISH stock. Most conspicuously, the satellite TV provider disclosed its earnings results for the fourth quarter last week. Specifically, it posted earnings per share of $1.47, beating out the consensus target of 47 cents. As well, it represented a major improvement from 87 cents in the year-ago quarter.
However, it did miss on revenue, posting $4.04 billion, which came in 2.3% below the consensus target. Further, in Q4 2021, DISH rang up $4.45 billion in top-line sales. Very quickly, investors soured on the news, sending DISH stock lower.
Why It Matters
With Barden’s double downgrade, DISH stock now carries a consensus “hold” rating. However, speculators may notice that DISH still features an average price target of $18.38. From the time of writing, this forecast implies a growth of over 63%.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.