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EchoStar's (SATS) Hughes Gets Production Contract From GA-ASI

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EchoStar Corporation’s (SATS - Free Report) subsidiary, Hughes Network Systems LLC, has clinched a production contract from General Atomics Aeronautical Systems, Inc (“GA-ASI”). The contract involves production of a vital component of the advanced satellite communications system for MQ-1C Gray Eagle 25M Unmanned Aircraft System (UAS).

Hughes will be producing innovative HM400T modems, which are based on HM400 modem technology that is presently used in GA-ASI’s MQ-9B UAS.

HM400T modems can be combined with Department of Defense’s (DoD) standard waveform technology and transmission security features. This will boost strength and resilience for Gray Eagle 25M's Airborne Intelligence, Surveillance and Reconnaissance mission requirements.

HM400T features a “ruggedized container” designed particularly for high altitude applications and also caters to low size, weight and power or SWAP requirements, highlighted Hughes.

HM400T modem is designed to support government approved waveforms to boost ISR transmissions for the United States’ army's advanced Gray Eagle 25M, MQ-1C, UAS and its upcoming missions.

Hughes was “awarded” the initial production units by GA-ASI, post conclusion of the development phase. Delivery of these communications systems is to be made in the spring, noted Hughes.

Headquartered in Englewood, CO, EchoStar is a global provider of satellite service operations, video delivery services, broadband satellite technologies and broadband internet services. The company also offers innovative network technologies, managed services, and various communications solutions for aeronautical, enterprise and government customers.

In January 2024, SATS announced that it acquired DISH network as a wholly-owned subsidiary. The merger between the two companies closed on Dec 31, 2023. The acquisition involved the merger of a wholly-owned subsidiary of EchoStar, led by Charlie Ergen, with DISH Network.

In the last reported quarter, SATS reported total revenues of $4.16 billion, down from $4.53 billion in the year-ago quarter. The downtick was primarily due to a decline in subscribers, particularly on the Pay-TV segment.

Currently, EchoStar carries a Zacks Rank #3 (Hold). Shares of SATS have lost 25.6% in the past year compared with the sub-industry’s decline of 49.5%.

Stocks to Consider

Some better-ranked stocks worth consideration in the broader technology space are Synopsys (SNPS - Free Report) , Iridium Communications (IRDM - Free Report) and Pegasystems (PEGA - Free Report) . While SNPS and IRDM sport a Zacks Rank #1 (Strong Buy) each, PEGA carries a Zacks Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for SNPS’ fiscal 2024 EPS is pegged at $13.36. The long-term earnings growth rate is 17.5%. SNPS’ earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 4.1%. Shares of SNPS have soared 51.7% in the past year.

The Zacks Consensus Estimate for IRDM’s 2024 EPS has increased 148.3% in the past 60 days to 72 cents.  Iridium’s earnings beat the Zacks Consensus Estimate in two of the last four quarters and missed twice. The average earnings surprise is 91.7%.

The Zacks Consensus Estimate for PEGA’s 2024 EPS has increased 19.4% in the past 60 days to $2.77. Pegasystems’ earnings beat the Zacks Consensus Estimate in two of the last four quarters, while missed the same in the remaining quarters. The average earnings surprise is 1063.8%. Shares of PEGA have gained 31.4% in the past year.

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