Iridium Communications (IRDM) AI Stock Analysis

• Market Cap: $2.53B
• Dividend Yield: 2.4%
• Average Volume (3M): 1.40M
• Price to Earnings (P/E): 24.7
• Beta (1Y): 0.73
• Revenue Growth: 5.05%
• EPS Growth: 632.38%
• Country: US
• Employees: 873
• Sector: Communication Services
• Sector Strength: 76
• Industry: Telecommunications Services
• EPS (TTM): 0.95
• Shares Outstanding: 108,732,960
• 10 Day Avg. Volume: 1,410,333
• 30 Day Avg. Volume: 1,396,490
• PEG Ratio: 0.04
• Price to Book (P/B): N/A
• Price to Sales (P/S): 3.62
• Price to Cash Flow (P/CF): 7.20
• P/FCF Ratio: 7.30
• 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: $37.25
• Price Target Upside: 64.46% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

Iridium Communications shows solid financial performance and a positive outlook from its latest earnings call, supporting a strong market position. However, technical indicators and valuation suggest potential caution, with a high P/E ratio and bearish momentum. Continued monitoring of IoT and broadband challenges is necessary to ensure sustained growth.

Positive Factors

Earnings

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

Share Buyback

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

Negative Factors

IOT Business Risks

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.

IOT Subscriber Growth

The fixed price contract for Internet of things service resulted in a decline in IOT subscribers in the quarter.

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 exhibits strong financial performance with substantial revenue growth, improved profitability, and robust cash flow management. Despite a healthy balance sheet with reduced leverage, the declining equity ratio remains a concern. Overall, financial metrics support continued growth and stability.

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: Negative
• Last Price: 22.65
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• 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 Negative. The current price of 22.65 is below the 20-day moving average (MA) of 27.04, below the 50-day MA of 28.80, and below the 200-day MA of 28.30, indicating a bearish trend. The MACD of -0.49 indicates Positive momentum. The RSI at 40.28 is Neutral, neither overbought nor oversold. The STOCH value of 19.78 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IRDM.

Iridium Communications Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TIMB	82 Outperform	$6.92B	12.58	12.04%	3.18%	-0.91%	1.51%
IRDM	70 Outperform	$2.53B	24.73	15.40%	2.40%	5.05%	632.38%
TDS	64 Neutral	$3.77B	―	-0.54%	0.45%	-3.80%	83.27%
Sector *	58 Neutral	$24.96B	3.11	-10.53%	4.28%	2.32%	-43.03%
VEON	58 Neutral	$2.75B	6.53	39.15%	―	7.44%	-360.33%
LUMN	47 Neutral	$3.35B	―	-12.49%	―	-9.95%	99.47%
GSAT	46 Neutral	$2.36B	―	-17.12%	―	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.