Amazon.com Inc.‘s (NASDAQ:AMZN) recent $11.7 billion acquisition of satellite operator Globalstar Inc. (NASDAQ:GSAT) has strengthened Wall Street’s bullish outlook, with Citizens reiterating its “Market Outperform” rating and a $315 price target, representing a 26.5% upside from current levels.
Strategic Satellite Expansion
Citizens analyst Andrew Boone views the Globalstar acquisition as a major catalyst for Amazon’s long-term connectivity strategy. The deal gives Amazon access to operational direct-to-device services and valuable low-frequency spectrum, directly supporting its growing satellite network.
“Strategically, the deal accelerates Amazon’s ability to offer a consumer subscription service as Globalstar has a scaled and operational direct-to-device service,” Boone noted.
The analyst emphasized that this move positions Amazon to tap into the massive ~$800 billion global mobile telecom market. Over time, Amazon could bundle a direct-to-consumer satellite subscription into its popular Prime membership, although Boone acknowledges this consumer offering is still “years away.”
Financially, integrating Globalstar’s spectrum and gateway stations makes it easier to monetize Amazon’s growing capacity, pulling forward revenue opportunities.
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