Iridium Communications (IRDM) AI Stock Analysis

• Market Cap: $2.84B
• Dividend Yield: 2.15%
• Average Volume (3M): 1.53M
• Price to Earnings (P/E): 24.2
• Beta (1Y): 0.70
• Revenue Growth: 6.64%
• EPS Growth: 403.10%
• Country: US
• Employees: 873
• Sector: Communication Services
• Sector Strength: 82
• Industry: Telecommunications Services
• EPS (TTM): 0.27
• Shares Outstanding: 108,160,324
• 10 Day Avg. Volume: 2,050,709
• 30 Day Avg. Volume: 1,534,511
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.68
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 7.32
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $37.50
• Price Target Upside: 41.78% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7

Iridium Communications' strong financial performance and prudent cash flow management are significant strengths, supporting a solid financial foundation. The bearish technical indicators suggest caution in the short term. Valuation appears reasonable, with a fair P/E ratio and a solid dividend yield. The earnings call reflects a balanced outlook, with strategic adjustments in place to manage external challenges. Overall, the company's robust financial health and strategic positioning within the telecommunications industry contribute to a favorable stock score.

Positive Factors

Financial Performance

Iridium Communications reported fourth quarter revenue of approximately $213.0 million compared to the estimate of $203.7 million.

Partnerships

Iridium’s partnerships with Garmin and the U.S. Department of Defense will continue to expand.

Shareholder Value

Iridium has been buying back approximately 10% of its float per year, which is expected to continue into the 2030s.

Negative Factors

Competition

There is concern around potential risk to Iridium Communications' IoT business due to the recent SpaceX momentum in Direct-to-Device, such as T-Mobile Starlink trials.

Market Competition

The main downside risk to shares is intensifying competition from SpaceX and Apple.

Revenue Growth Challenges

Operational EBITDA is projected to only increase by as much as 4 percent compared to service revenue growth of five percent.

Iridium Communications Business Overview & Revenue Model

Company Description

Iridium Communications Inc. provides mobile voice and data communications services and products to businesses, the United States and international governments, non-governmental organizations, and consumers worldwide. The company offers postpaid mobile voice and data satellite communications; prepaid mobile voice satellite communications; push-to-talk; broadband data; and Internet of Things (IoT) services. It also provides hosted payload and other data services, such as satellite time and location services, and inbound connections from the public switched telephone network, short message, subscriber identity module, activation, customer reactivation, and other peripheral services. In addition, the company offers voice and data solutions comprising personnel tracking devices; asset tracking devices for equipment, vehicles, and aircrafts; beyond-line-of-sight aircraft communications applications; maritime communications applications; specialized communications solutions for high-value individuals; mobile communications and data devices for the military and intelligence agencies, such as secure satellite handsets, as well as netted voice, messaging, and paging services; and maintenance services for the United States government's dedicated gateway. Further, it provides satellite handsets, personal connectivity devices, voice and data modems, broadband data devices, and IoT data devices; various accessories for its devices that include batteries, holsters, earbud headphones, portable auxiliary antennas, antenna adaptors, USB data cables, charging units, and others; and engineering and support services. Iridium Communications Inc. sells its products and services to commercial end users through a wholesale distribution network that include service providers, and value-added resellers and manufacturers. The company was formerly known as Iridium Holdings LLC and changed its name to Iridium Communications Inc. in September 2009. Iridium Communications Inc. was founded in 2000 and is headquartered in McLean, Virginia.

How the Company Makes Money

Iridium Communications generates revenue primarily through the provision of satellite communication services, which are divided into several key streams. The company's primary source of income is service revenue, which includes fees from voice and data communications through its network. This includes subscription-based services for voice calls, messaging, and broadband data, catering to a diverse clientele ranging from maritime, aviation, and government sectors to individual consumers in remote areas. Additionally, Iridium earns revenue through equipment sales, including satellite phones, transceivers, and related accessories. Partnerships with government agencies, particularly the U.S. Department of Defense, also contribute significantly to its revenue, offering specialized services and equipment for tactical communication needs. Furthermore, Iridium has developed partnerships with various technology and service providers to expand its IoT offerings, enabling device connectivity across its global network.

Iridium Communications Financial Statement Overview

Summary

Iridium Communications demonstrates strong revenue and profit growth, supported by effective cash flow management. The company maintains a solid balance sheet with prudent leveraging, contributing to its financial stability. While net income variability and a decline in equity warrant attention, the overall financial health remains robust.

Income Statement

Iridium Communications exhibits strong revenue growth, as evidenced by a 10.21% increase from 2023 to 2024 and a robust 16.40% growth from 2022 to 2023. The company maintains healthy gross and EBITDA margins, reinforcing its profitability. However, the net profit margin has fluctuated, indicating some variability in net income performance. Overall, the firm demonstrates a positive growth trajectory and solid operational efficiency, although improvements in net income stability could enhance its financial standing.

Balance Sheet

The balance sheet shows a strong equity position with a stable equity ratio, as stockholders' equity consistently represents a significant portion of total assets. The debt-to-equity ratio is low, indicating prudent leveraging and financial stability. However, a notable decline in total equity from 2021 to 2023 suggests potential concerns in asset management or profitability. Despite this, the company's current financial leverage is manageable, reflecting a stable financial foundation.

Cash Flow

The cash flow statement highlights consistent positive operating cash flow, which supports the firm's ability to generate cash from operations effectively. Free cash flow remains strong, showcasing efficient capital expenditure management. The operating cash flow to net income ratio is high, indicating robust cash generation relative to net income. Nonetheless, fluctuations in free cash flow growth suggest potential variability in capital allocation or operational investments.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
830.68M	790.72M	721.03M	614.50M	583.44M
	Gross Profit
652.54M	565.60M	519.88M	464.10M	440.75M
	EBIT
200.38M	81.63M	76.68M	46.31M	35.48M
	EBITDA
415.67M	380.07M	380.16M	351.75M	338.66M
	Net Income Common Stockholders
112.78M	15.41M	8.72M	-9.32M	-56.05M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
93.53M	71.87M	168.77M	320.91M	244.73M
	Total Assets
2.67B	2.66B	2.95B	3.18B	3.36B
	Total Debt
1.79B	1.48B	1.49B	1.60B	1.61B
	Net Debt
1.70B	1.41B	1.32B	1.28B	1.38B
	Total Liabilities
2.09B	1.77B	1.83B	1.89B	1.94B
	Stockholders Equity
576.64M	888.10M	1.13B	1.29B	1.42B
Cash Flow		Free Cash Flow
306.06M	241.43M	273.46M	260.73M	211.08M
	Operating Cash Flow
375.95M	314.91M	344.73M	302.87M	249.77M
	Investing Cash Flow
-180.60M	-83.49M	-121.27M	-36.38M	-46.47M
	Financing Cash Flow
-170.48M	-327.05M	-374.98M	-182.47M	-188.19M

Iridium Communications Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 26.45
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IRDM, the sentiment is Neutral. The current price of 26.45 is above the 20-day moving average (MA) of 24.27, above the 50-day MA of 26.34, and below the 200-day MA of 28.14, indicating a neutral trend. The MACD of 0.06 indicates Negative momentum. The RSI at 59.49 is Neutral, neither overbought nor oversold. The STOCH value of 87.84 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for IRDM.

Iridium Communications Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TIMB	80 Outperform	$8.42B	13.44	12.04%	6.65%	-0.91%	1.51%
IRDM	72 Outperform	$2.84B	24.20	18.01%	2.15%	6.64%	403.10%
VEON	63 Neutral	$3.23B	7.77	42.31%	―	8.27%	―
Sector *	60 Neutral	$13.50B	7.33	-2.74%	3.80%	2.09%	-39.49%
TDS	53 Neutral	$3.64B	―	-0.97%	0.47%	-5.14%	78.63%
LUMN	52 Neutral	$4.37B	―	-78.94%	―	-7.86%	97.11%
GSAT	42 Neutral	$2.51B	―	-18.66%	―	14.55%	-81.21%

Iridium Communications Corporate Events

Iridium Communications Approves 2025 Performance Bonus Plan

On February 6, 2025, Iridium Communications’ Compensation Committee approved the 2025 Performance Bonus Plan. This plan involves a bonus system for employees, including key executives, based on achieving specific corporate and personal performance goals. The bonuses are calculated using a combination of a target bonus percentage and a performance factor, with potential payouts up to 200% of the target. The plan also includes provisions for restricted stock units and cash payouts, with vesting based on performance and continued service.