Morgan Stanley analyst Justin Lang CFA maintained a Buy rating on Iridium Communications today and set a price target of $40.00.
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Justin Lang CFA has given his Buy rating due to a combination of factors that highlight Iridium Communications as a strong investment opportunity. One of the primary reasons is the company’s significant exposure to government contracts, which positions it as a potentially underappreciated player in the defense sector. This exposure, coupled with the potential for substantial opportunities in areas such as drones and defense technologies, underscores the company’s strategic importance. Additionally, Iridium’s strong free cash flow generation and capital return prospects are notable advantages that set it apart from competitors.
Furthermore, Justin Lang CFA points out that Iridium occupies a well-defended niche in the satellite communications industry, making it less vulnerable to potential disruptions from competitors like Starlink. The company’s valuation is also considered attractive, with a favorable free cash flow yield and EBITDA multiple. These factors, combined with the expectation of stable or growing government subscriptions and potential updates on direct-to-device advancements, reinforce the Buy rating as Iridium is poised for continued outperformance.
In another report released on July 17, Cantor Fitzgerald also reiterated a Buy rating on the stock with a $40.00 price target.
Based on the recent corporate insider activity of 81 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of IRDM in relation to earlier this year.