IRIDIUM COMMUNICATIONS INC (IRDM) Stock Fundamental Analysis
NASDAQ:IRDM - Nasdaq - US46269C1027 - Common Stock - Currency: USD
Taking everything into account, IRDM scores 5 out of 10 in our fundamental rating. IRDM was compared to 32 industry peers in the Diversified Telecommunication Services industry. While IRDM belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. IRDM is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
IRDM had positive earnings in the past year.
In the past year IRDM had a positive cash flow from operations.
In multiple years IRDM reported negative net income over the last 5 years.
In the past 5 years IRDM always reported a positive cash flow from operatings.
1.2 Ratios
IRDM has a better Return On Assets (4.22%) than 77.42% of its industry peers.
IRDM has a better Return On Equity (19.56%) than 93.55% of its industry peers.
IRDM has a better Return On Invested Capital (7.22%) than 80.65% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for IRDM is in line with the industry average of 5.44%.
The 3 year average ROIC (4.17%) for IRDM is below the current ROIC(7.22%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.22% | ||
| ROE | 19.56% | ||
| ROIC | 7.22% |
ROA(3y)1.7%
ROA(5y)0.63%
ROE(3y)7.35%
ROE(5y)3.48%
ROIC(3y)4.17%
ROIC(5y)2.96%
1.3 Margins
IRDM has a Profit Margin of 13.58%. This is amongst the best in the industry. IRDM outperforms 87.10% of its industry peers.
IRDM's Operating Margin of 24.50% is amongst the best of the industry. IRDM outperforms 90.32% of its industry peers.
In the last couple of years the Operating Margin of IRDM has grown nicely.
IRDM's Gross Margin of 72.24% is amongst the best of the industry. IRDM outperforms 87.10% of its industry peers.
In the last couple of years the Gross Margin of IRDM has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 24.5% | ||
| PM (TTM) | 13.58% | ||
| GM | 72.24% |
OM growth 3Y48.14%
OM growth 5Y68.52%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-1.47%
GM growth 5Y-0.51%
2. Health
2.1 Basic Checks
IRDM has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
IRDM has less shares outstanding than it did 1 year ago.
The number of shares outstanding for IRDM has been reduced compared to 5 years ago.
Compared to 1 year ago, IRDM has a worse debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.42, we must say that IRDM is in the distress zone and has some risk of bankruptcy.
With an excellent Altman-Z score value of 1.42, IRDM belongs to the best of the industry, outperforming 80.65% of the companies in the same industry.
The Debt to FCF ratio of IRDM is 5.85, which is a neutral value as it means it would take IRDM, 5.85 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of IRDM (5.85) is better than 87.10% of its industry peers.
IRDM has a Debt/Equity ratio of 3.05. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 3.05, IRDM is doing worse than 77.42% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.05 | ||
| Debt/FCF | 5.85 | ||
| Altman-Z | 1.42 |
ROIC/WACC0.92
WACC7.83%
2.3 Liquidity
IRDM has a Current Ratio of 1.73. This is a normal value and indicates that IRDM is financially healthy and should not expect problems in meeting its short term obligations.
IRDM's Current ratio of 1.73 is amongst the best of the industry. IRDM outperforms 87.10% of its industry peers.
IRDM has a Quick Ratio of 1.25. This is a normal value and indicates that IRDM is financially healthy and should not expect problems in meeting its short term obligations.
IRDM has a Quick ratio of 1.25. This is in the better half of the industry: IRDM outperforms 74.19% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.73 | ||
| Quick Ratio | 1.25 |
3. Growth
3.1 Past
IRDM shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 700.00%, which is quite impressive.
Looking at the last year, IRDM shows a small growth in Revenue. The Revenue has grown by 5.05% in the last year.
IRDM shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 8.19% yearly.
EPS 1Y (TTM)700%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%10.34%
Revenue 1Y (TTM)5.05%
Revenue growth 3Y10.57%
Revenue growth 5Y8.19%
Sales Q2Q%9.37%
3.2 Future
IRDM is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 20.98% yearly.
The Revenue is expected to grow by 4.90% on average over the next years.
EPS Next Y2.6%
EPS Next 2Y16.7%
EPS Next 3Y20.98%
EPS Next 5YN/A
Revenue Next Year5.16%
Revenue Next 2Y4.89%
Revenue Next 3Y5.72%
Revenue Next 5Y4.9%
3.3 Evolution
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 32.38, the valuation of IRDM can be described as expensive.
IRDM's Price/Earnings ratio is in line with the industry average.
When comparing the Price/Earnings ratio of IRDM to the average of the S&P500 Index (29.63), we can say IRDM is valued inline with the index average.
IRDM is valuated quite expensively with a Price/Forward Earnings ratio of 31.56.
IRDM's Price/Forward Earnings is on the same level as the industry average.
The average S&P500 Price/Forward Earnings ratio is at 22.68. IRDM is valued slightly more expensive when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.38 | ||
| Fwd PE | 31.56 |
4.2 Price Multiples
IRDM's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. IRDM is more expensive than 61.29% of the companies in the same industry.
IRDM's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.56 | ||
| EV/EBITDA | 12.88 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates IRDM does not grow enough to justify the current Price/Earnings ratio.
IRDM has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as IRDM's earnings are expected to grow with 20.98% in the coming years.
PEG (NY)12.46
PEG (5Y)N/A
EPS Next 2Y16.7%
EPS Next 3Y20.98%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.71%, IRDM has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 4.85, IRDM pays a bit more dividend than its industry peers.
IRDM's Dividend Yield is slightly below the S&P500 average, which is at 2.27.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.71% |
5.2 History
The dividend of IRDM is nicely growing with an annual growth rate of 69.07%!
IRDM does not have a reliable dividend history as it only pays dividend since a couple or years.
Dividend Growth(5Y)69.07%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
IRDM pays out 57.40% of its income as dividend. This is a bit on the high side, but may be sustainable.
The dividend of IRDM is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP57.4%
EPS Next 2Y16.7%
EPS Next 3Y20.98%
31.08
-1.04 (-3.24%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupTelecommunication Services
GICS IndustryDiversified Telecommunication Services
Earnings (Last)
Earnings (Next)
Inst Owners91.9%
Inst Owner Change-84.75%
Ins Owners2.24%
Ins Owner Change0.28%
Market Cap3.54B
Analysts80
Price Target41.97 (35.04%)
Short Float %8.37%
Short Ratio8.14
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.71% |
Yearly Dividend0.56
Dividend Growth(5Y)69.07%
DP57.4%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)49.25%
Min EPS beat(2)3.98%
Max EPS beat(2)94.51%
EPS beat(4)4
Avg EPS beat(4)38.55%
Min EPS beat(4)3.06%
Max EPS beat(4)94.51%
EPS beat(8)6
Avg EPS beat(8)287.99%
EPS beat(12)9
Avg EPS beat(12)365.01%
EPS beat(16)12
Avg EPS beat(16)285.71%
Revenue beat(2)2
Avg Revenue beat(2)1.71%
Min Revenue beat(2)1.17%
Max Revenue beat(2)2.26%
Revenue beat(4)3
Avg Revenue beat(4)1.06%
Min Revenue beat(4)-2.34%
Max Revenue beat(4)3.15%
Revenue beat(8)4
Avg Revenue beat(8)0.23%
Revenue beat(12)7
Avg Revenue beat(12)1.55%
Revenue beat(16)9
Avg Revenue beat(16)1.22%
PT rev (1m)1.59%
PT rev (3m)1.34%
EPS NQ rev (1m)6.16%
EPS NQ rev (3m)11.62%
EPS NY rev (1m)-0.23%
EPS NY rev (3m)0.69%
Revenue NQ rev (1m)1.06%
Revenue NQ rev (3m)9.44%
Revenue NY rev (1m)1.45%
Revenue NY rev (3m)1.32%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.38 | ||
| Fwd PE | 31.56 | ||
| P/S | 4.26 | ||
| P/FCF | 11.56 | ||
| P/OCF | 9.41 | ||
| P/B | 6.14 | ||
| P/tB | 9.13 | ||
| EV/EBITDA | 12.88 |
EPS(TTM)0.96
EY3.09%
EPS(NY)0.98
Fwd EY3.17%
FCF(TTM)2.69
FCFY8.65%
OCF(TTM)3.3
OCFY10.62%
SpS7.3
BVpS5.06
TBVpS3.4
PEG (NY)12.46
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.22% | ||
| ROE | 19.56% | ||
| ROCE | 8.13% | ||
| ROIC | 7.22% | ||
| ROICexc | 7.5% | ||
| ROICexgc | 8.14% | ||
| OM | 24.5% | ||
| PM (TTM) | 13.58% | ||
| GM | 72.24% | ||
| FCFM | 36.85% |
ROA(3y)1.7%
ROA(5y)0.63%
ROE(3y)7.35%
ROE(5y)3.48%
ROIC(3y)4.17%
ROIC(5y)2.96%
ROICexc(3y)4.34%
ROICexc(5y)3.12%
ROICexgc(3y)4.59%
ROICexgc(5y)3.27%
ROCE(3y)4.7%
ROCE(5y)3.34%
ROICexcg growth 3Y75.01%
ROICexcg growth 5Y96.64%
ROICexc growth 3Y71.22%
ROICexc growth 5Y94.01%
OM growth 3Y48.14%
OM growth 5Y68.52%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-1.47%
GM growth 5Y-0.51%
F-Score7
Asset Turnover0.31
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.05 | ||
| Debt/FCF | 5.85 | ||
| Debt/EBITDA | 4.32 | ||
| Cap/Depr | 34.41% | ||
| Cap/Sales | 8.41% | ||
| Interest Coverage | 2.13 | ||
| Cash Conversion | 92.46% | ||
| Profit Quality | 271.39% | ||
| Current Ratio | 1.73 | ||
| Quick Ratio | 1.25 | ||
| Altman-Z | 1.42 |
F-Score7
WACC7.83%
ROIC/WACC0.92
Cap/Depr(3y)26.95%
Cap/Depr(5y)21.48%
Cap/Sales(3y)9.2%
Cap/Sales(5y)8.22%
Profit Quality(3y)1660.03%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)700%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%10.34%
EPS Next Y2.6%
EPS Next 2Y16.7%
EPS Next 3Y20.98%
EPS Next 5YN/A
Revenue 1Y (TTM)5.05%
Revenue growth 3Y10.57%
Revenue growth 5Y8.19%
Sales Q2Q%9.37%
Revenue Next Year5.16%
Revenue Next 2Y4.89%
Revenue Next 3Y5.72%
Revenue Next 5Y4.9%
EBIT growth 1Y149.38%
EBIT growth 3Y63.8%
EBIT growth 5Y82.32%
EBIT Next Year141.66%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y26.77%
FCF growth 3Y5.48%
FCF growth 5Y30.68%
OCF growth 1Y19.38%
OCF growth 3Y7.47%
OCF growth 5Y13.67%