Iridium Communications (IRDM) AI Stock Analysis

• Market Cap: $3.27B
• Dividend Yield: 1.78%
• Average Volume (3M): 1.36M
• Price to Earnings (P/E): 31.9
• Beta (1Y): 0.65
• Revenue Growth: 5.05%
• EPS Growth: 632.38%
• Country: US
• Employees: 873
• Sector: Communication Services
• Sector Strength: 85
• Industry: Telecommunications
• EPS (TTM): 0.95
• Shares Outstanding: 108,839,160
• 10 Day Avg. Volume: 1,297,816
• 30 Day Avg. Volume: 1,358,093
• PEG Ratio: 0.05
• Price to Book (P/B): N/A
• Price to Sales (P/S): 4.05
• Price to Cash Flow (P/CF): 8.00
• P/FCF Ratio: 8.20
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $37.00
• Price Target Upside: 23.17% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

Iridium's overall stock score reflects strong financial performance and positive earnings call sentiment, bolstered by technical momentum. However, its high valuation could deter some investors. Challenges in IoT and broadband need addressing to sustain growth.

Positive Factors

Capital strategy

Iridium Communications has repurchased approximately 4% of shares outstanding recently, indicating strong capital return potential.

Financial performance

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

Negative Factors

Competitive pressure

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.

Iridium Communications Business Overview & Revenue Model

Company Description

Iridium Communications, Inc. is a mobile voice and data satellite communications network. Its satellite network provides communication where terrestrial wireless or wireline networks do not exist or are limited. The company's principal lines of business include Land Mobile, Maritime, Aviation, and Government. The Land Mobile business engages in the provision of mobile satellite communications services to the land mobile sector, providing handset services to areas not served or inconsistently served by existing terrestrial communications networks. The Maritime business provides broadband terminals, embedded devices and handsets. Its market space includes merchant shipping, fishing, research vessels and specialized water craft. The Aviation business provides mobile satellite communications services to the aviation sector. Its services are used in commercial and global government aviation applications, principally by corporate jets, corporate and government helicopter fleets, specialized general aviation fleets, such as medevac companies and fire suppression fleets, and high-end personal aircraft. The Government business line involves in the provision of mobile satellite communications services to the U.S. government, principally the Department of Defense. Its voice products are used for a variety of primary and backup communications solutions, including tactical operations, logistical, administrative, morale and welfare, and emergency communications. The firm's commercial services include: Postpaid Mobile Voice and Data Satellite Communications, Prepaid Mobile Voice Satellite Communications, Iridium PTT, Broadband Data, and Machine-to-Machine services. Iridium Communications was founded on November 2, 2007 and is headquartered in McLean, VA.

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 displays strong financial performance with robust revenue growth, improved profitability, and effective cash flow management. However, a declining equity ratio suggests a need for bolstering equity to maintain flexibility.

Income Statement

Iridium Communications has demonstrated strong revenue growth with a steady increase from $560 million in 2019 to $831 million in 2024, indicating effective expansion strategies. The gross profit margin remains high, showcasing efficient cost management. Net profit margin improved significantly from negative in earlier years to 13.6% in 2024, reflecting enhanced profitability. EBIT and EBITDA margins have also shown positive trends, suggesting robust operational performance.

Balance Sheet

The company has improved its debt position considerably, with total debt reducing significantly by 2024. The debt-to-equity ratio stands low, indicating reduced financial leverage. However, the equity ratio has decreased over the years, reflecting a higher proportion of liabilities in the asset base. Return on equity has improved correlating with increased net income, though the equity base has been shrinking, which could be a concern.

Cash Flow

The operating cash flow has shown a consistent upward trajectory, indicating strong cash generation capabilities. Free cash flow has also grown significantly, demonstrating efficient capital expenditure management. The ratio of operating cash flow to net income is healthy, further supporting the company’s ability to convert earnings into cash. Free cash flow growth rate is impressive, highlighting effective financial management.

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
404.05M	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
33.12M	1.48B	1.49B	1.60B	1.61B
	Net Debt
-60.41M	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: Positive
• Last Price: 30.04
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IRDM, the sentiment is Positive. The current price of 30.04 is below the 20-day moving average (MA) of 30.47, above the 50-day MA of 29.58, and above the 200-day MA of 28.54, indicating a neutral trend. The MACD of 0.54 indicates Positive momentum. The RSI at 47.40 is Neutral, neither overbought nor oversold. The STOCH value of 9.35 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IRDM.

Iridium Communications Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NOC	79 Outperform	$67.14B	16.37	27.30%	1.70%	4.44%	110.33%
IRDM	72 Outperform	$3.27B	31.91	19.56%	1.78%	5.05%	632.38%
Sector *	59 Neutral	$30.54B	0.25	-13.23%	4.04%	2.36%	-49.53%
SPIR	57 Neutral	$289.31M	―	-90.67%	―	24.15%	35.73%
SATS	51 Neutral	$8.95B	―	-0.13%	―	-6.99%	91.98%
VSAT	49 Neutral	$1.10B	―	-8.28%	―	19.02%	76.67%
GSAT	46 Neutral	$2.65B	―	-20.56%	―	11.86%	-140.69%

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.

Iridium Communications Updates Bylaws and Announces Dividend

Iridium Communications Inc. has updated its Bylaws to align with regulatory changes, enhance procedural requirements for stockholder meetings, and streamline language. Key updates include enhanced disclosure requirements, compliance with the universal proxy rules, and clarified voting procedures. Additionally, the company announced a dividend of $0.14 per share, payable on December 31, 2024, highlighting its commitment to shareholder value.