The Zacks Satellite and Communication industry is undergoing a transformative phase, driven by the convergence of rapid technological progress and higher global connectivity requirements. Increasing interest in space-based infrastructure drives the industry's prospects. The expansion of the Internet in remote areas through emerging low Earth orbit (“LEO”) constellations, such as Starlink and OneWeb, is driving demand for satellite broadband services. Embedding of AI and machine learning has given rise to multiple use cases across industries such as oil and gas, agriculture, transportation and non-governmental organizations.

EchoStar Corporation (SATS Quick QuoteSATS - Free Report) , Planet Labs PBC (PL Quick QuotePL - Free Report) and Iridium Communications (IRDM Quick QuoteIRDM - Free Report) have significant growth potential amid simmering geopolitical tensions, surging defense budgets and demand for high-quality imagery and value-added services.

However, macroeconomic uncertainty, evolving trade policies, inflation and supply-chain dynamics could impact the industry’s outlook. Additionally, high capital spending and extended return-on-investment cycles may strain the profitability of existing players and discourage new entrants. Spectrum allocation, orbital congestion and regulatory approvals remain key risks.

Industry Description

The Zacks Satellite and Communication industry includes space technology companies that offer satellite imagery, intelligence services and spacecraft and robotics for space exploration, research and national security. They assist customers in understanding and navigating the changing planet, provide global broadband communications and explore space. These companies deliver communication services to media businesses, fixed and wireless telecommunications providers, data networking companies and Internet service providers. They also supply commercial satellite communication services to government and military entities. Additionally, the firms offer satellite-based consulting and technical services, covering the entire satellite lifecycle and infrastructure, from satellite and launch vehicle procurement to telemetry and commanding services.

What's Shaping the Industry's Future?

Advancements in Technology Hold the Key: Rapid technological advancement is the primary catalyst driving the industry’s growth trajectory. Integration of space-based networks with terrestrial telecom networks, as well as cloud computing and AI, marks a new phase of growth. The integration of Geosynchronous Equatorial Orbit (“GEO”) and LEO constellations with terrestrial networks is enabling trade-offs between coverage, latency and capacity. Direct-to-device (“D2D”) and non-terrestrial networks (“NTN”) are extending satellite connectivity directly to smartphones and IoT endpoints. Reusable rockets, mass-produced satellites and low-cost launch systems are significantly improving prospects for the participants.

A mass-produced system is adopted and several satellites are manufactured in an assembly line. Integration and testing have become highly automated. The extent of testing is lowered after prototyping and initial production is completed. Countries with comprehensive space programs have distinct military, economic and scientific advantages. However, complexity and barriers to entry into space have allowed only a few to develop notable capabilities. The demand for small satellites across regions is expected to increase over time. North America has the bulk of the market share, followed by the Asia Pacific, Europe and the rest of the world.

North America maintains its dominance with the highest number of small satellite launches by government end users. The companies continue to align their products and services with the needs of the U.S. Department of Defense’s National Defense Strategy and the growing demand for international defense and intelligence.

End-market Momentum to Drive Growth: Wide proliferation and cheaper access to space technology have led to diverse end-market users. The companies share a strategic relationship with various government organizations, including military and disaster response agencies and non-governmental organizations, to provide robust, tactical, real-time voice and low-latency data command and control communications. A comprehensive product portfolio enables companies to expand their customer base and offset the losses from one product category with the benefits from another. High product quality increases brand loyalty and enhances performance in a competitive market.

For civil customers, notably NASA, growth is being driven by space exploration programs. For commercial customers, growth drivers include a strong demand for imagery due to new use cases, space-based remote sensing, GEO replacement demand and LEO communications programs. Advanced mobile networks need strong backhaul and global infrastructure, increasing reliance on satellite support for rural and oceanic coverage.

Spending on Space Infrastructure Could be Affected by Macroeconomic Weakness: With more than half of revenues from government customers, the industry will likely benefit from increasing defense and space infrastructure budgets amid simmering geopolitical tensions. The explosion of space-based intelligence, surveillance, and reconnaissance and communications is expected to boost government investments in the sector.

However, weakness in global macroeconomic conditions amid tariff troubles could compel customers to lower spending, which does not bode well for industry participants. Volatile supply-chain dynamics and inflation could lead to higher costs and increased lead time, which are major concerns. Also, competition from fiber optics and terrestrial networks, in certain regions, could deter the growth of the industry participants, as these may offer relatively lower-cost and higher-speed alternatives.

Capital-Intensive Sector: The satellite industry is one of the most capital-intensive sectors, requiring substantial upfront investment in satellite manufacturing, launch services and ground infrastructure. Further, an increasing number of satellites is raising concerns about space debris and orbital congestion. Risks of collision may disrupt operational satellites and the viability of space activities. Managing these risks requires advanced devices such as improved tracking systems and coordination, adding a layer of operational complexity.  

Zacks Industry Rank Indicates Bright Prospects

The Zacks Satellite and Communication industry is housed within the broader Zacks Computer and Technology sector. The industry currently has a Zacks Industry Rank #96, which places it in the top 39% of more than 244 Zacks industries.

The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates bright near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.

Before we present a few satellite and communication stocks you may want to consider for your portfolio, let’s look at the industry’s recent stock market performance and valuation picture.

Industry Outperforms the Sector and the S&P 500

In the past year, the Zacks Satellite and Communication industry outperformed the S&P 500 composite and the broader Zacks Computer and Technology sector.

The industry has gained 334.6% over this period compared with the S&P 500’s rise of 29.1%. The broader sector has moved up 43.1%.

One-Year Price Performance

 

Industry's Current Valuation

The industry has a trailing 12-month price/book ratio of 7.3X compared with the S&P 500’s 7.75X. The sector’s trailing 12-month price/book ratio stands at 9.36X.

In the past five years, the industry has traded as high as 7.49X and as low as 0.43X, with a median of 3.07X, as the chart below shows.

 

3 Stocks to Add to the Watchlist

EchoStar: The company is a global provider of satellite communication solutions, broadband services and video delivery platforms under its brands EchoStar, Sling TV, Boost Mobile, Boost Infinite, DISH TV, Hughes, HughesNet, HughesON and JUPITER brands.

SATS has been widely in the news owing to its dealings with SpaceX. Last September, the company announced a definitive agreement with SpaceX to sell its AWS-4 and H-block spectrum licenses in a transaction valued at $17 billion. The deal includes up to $8.5 billion in cash and up to $8.5 billion in SpaceX stock, valued at the time the agreement was executed. Also, SpaceX has committed to fund around $2 billion in cash interest payments on EchoStar’s debt through November 2027, further strengthening the latter’s near-term financial position.

The company also has established technical and financial arrangements with SpaceX for access to its Starlink Direct-to-Cell system, enabling Boost Mobile to offer satellite-based connectivity. In November, SATS announced that it was selling unpaired AWS-3 licenses for $2.6 billion to SpaceX in exchange for stock (valued as of September 2025). Earlier, it announced the sale of 600 MHz and 3.45 GHz (C-band) spectrum licenses to AT&T for nearly $23 billion. The speculations around SpaceX's IPO have also heightened investor interest in EchoStar. Given all these, SATS has found its way into the S&P 500 list as well.

Nonetheless, SATS continues to face challenges. Long-term debt, finance lease and other obligations (net of current portion) were $18.7 billion as of Dec 31, 2025. Massive debt remains an overhang. The Broadband and Satellite Services segment reported 2025 total revenues of $1.46 billion, down 7.6% year over year.

The earnings estimate for 2026 is pinned at a loss of $2.51 per share, unchanged over the past seven days. The stock has surged 455.8% in the past year.

At present, SATS carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. 

Price and Consensus: SATS

Iridium Communications: Headquartered in McLean, VA, operates one of the largest commercial constellations with a mesh architecture of 66 operational LEO satellites to route traffic using radio frequency crosslinks. The architecture provides strong performance by minimizing the need for ground infrastructure.

Iridium continues to deliver growth across commercial IoT, voice and data, and the government segment. IRDM’s new business line, known as Iridium Satellite Time and Location (“STL”), is a Positioning, Navigation and Timing (“PNT”) service that offers a resilient alternative to GPS and other GNSS systems, which can be vulnerable to jamming or spoofing. Iridium is also developing a quantum-safe cybersecurity solution using its PNT signal to enhance identity verification and authentication, targeting a share of the $20 billion identity verification market.

Management is focused on developing several services, including D2D (Iridium NTN Direct), an IoT (Iridium Certus IoT products), in addition to STL. Iridium’s 25-year relationship with the U.S. Department of Defense is a significant moat.

Aviation is another major growth pillar for Iridium, building on its role in cockpit safety links, uncrewed aircraft standards and the Aireon ADS-B venture. As the industry shifts from ground-based VHF to satellite for real-time, cost-efficient data, the company sees a strong opportunity to expand its safety and surveillance footprint, supported by fleet growth and rising demand for in-flight connectivity. Aireon remains central to this strategy, with the partnership targeting a $1-billion-plus market and reinforcing its durable competitive position in the satellite sector.

However, near-term financial growth remains modest. For 2026, service revenues are expected to be flat to up 2%, reflecting continued IoT growth offset by moderation elsewhere, following 2025 service revenues of $634 million.

Iridium expects 2026 OEBITDA of $480-$490 million compared with $495.3 million reported in 2025. The guidance includes a roughly $17 million hit from paying incentive compensation fully in cash rather than a mix of cash and equity. Excluding this accounting change, 2026 OEBITDA would have been $497-$507 million, indicating no underlying operational deterioration.

IRDM currently carries a Zacks Rank #3. The earnings estimate for 2026 is pegged at $1.09 per share, unchanged over the past seven days. The stock has gained 43.4% in the past year.  

Price and Consensus: IRDM

Planet Labs: The company offers daily satellite imagery and geospatial solutions. The company reported fiscal 2026 revenues of $307.7 million, up 26% year over year, with a backlog of $900 million, up 79%. The robust backlog improves revenue visibility with management guiding fiscal 2027 revenue growth of 39% at the midpoint.

A key contributor to top-line growth is the company’s Defense & Intelligence segment, which grew more than 50% year over year in fiscal 2026. Amid simmering geopolitical tensions, governments across the globe are focusing on security. The increasing need for real-time geospatial solutions is positioning Planet Labs as a key partner for governments and defense agencies worldwide. Planet Labs has won deals with the U.S. Department of Defense, NATO and the U.S. Missile Defense Agency.

Emerging Satellite Services business is another catalyst. Planet Labs has secured several large, multiyear contracts, including a €240 million agreement with Germany and a nine-figure deal with Sweden.

AI-enabled solutions are a strong addition to its growth narrative. The company expanded collaboration with NVIDIA on multiple fronts and is looking to add new capabilities by integrating the latter’s computing capacity with its data set. These capabilities are expected to expand use cases across industries such as insurance, agriculture, energy and logistics, potentially unlocking a huge addressable market over time. By leveraging the NVIDIA Jetson platform, Planet Labs recently implemented and executed an AI-driven object detection onboard its Pelican-4 satellite.

Despite strong growth, PL faces several challenges. The company expects gross margins to be around 50-52% in fiscal 2027, compared with 59% in fiscal 2026. Increasing investments in Satellite Services, AI capabilities and next-generation satellite fleets are an overhang. Weakness in the commercial segment is a concern, while AI monetization remains at an early stage.

PL currently carries a Zacks Rank #3. The bottom-line estimate for fiscal 2027 is pegged at a loss of 4 cents per share, unchanged over the past seven days. The stock has skyrocketed 987.8% in the past year.  

Price and Consensus: PL