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 has a great profitability rating, there are some minor concerns on its financial health. IRDM is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year IRDM was profitable.
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.
Each year in the past 5 years IRDM had a positive operating cash flow.
1.2 Ratios
IRDM's Return On Assets of 4.73% is fine compared to the rest of the industry. IRDM outperforms 78.13% of its industry peers.
IRDM has a Return On Equity of 23.83%. This is amongst the best in the industry. IRDM outperforms 90.63% of its industry peers.
IRDM's Return On Invested Capital of 7.61% is amongst the best of the industry. IRDM outperforms 84.38% of its industry peers.
The Average Return On Invested Capital over the past 3 years for IRDM is below the industry average of 7.13%.
The 3 year average ROIC (4.17%) for IRDM is below the current ROIC(7.61%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.73% | ||
| ROE | 23.83% | ||
| ROIC | 7.61% |
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 14.68%. This is amongst the best in the industry. IRDM outperforms 84.38% of its industry peers.
IRDM has a Operating Margin of 25.26%. This is amongst the best in the industry. IRDM outperforms 90.63% of its industry peers.
In the last couple of years the Operating Margin of IRDM has grown nicely.
With an excellent Gross Margin value of 72.45%, IRDM belongs to the best of the industry, outperforming 84.38% of the companies in the same industry.
IRDM's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 25.26% | ||
| PM (TTM) | 14.68% | ||
| GM | 72.45% |
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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), IRDM is destroying value.
The number of shares outstanding for IRDM has been reduced compared to 1 year ago.
Compared to 5 years ago, IRDM has less shares outstanding
Compared to 1 year ago, IRDM has a worse debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.41, we must say that IRDM is in the distress zone and has some risk of bankruptcy.
IRDM's Altman-Z score of 1.41 is fine compared to the rest of the industry. IRDM outperforms 78.13% of its industry peers.
The Debt to FCF ratio of IRDM is 6.32, which is on the high side as it means it would take IRDM, 6.32 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 6.32, IRDM belongs to the top of the industry, outperforming 81.25% of the companies in the same industry.
A Debt/Equity ratio of 3.43 is on the high side and indicates that IRDM has dependencies on debt financing.
IRDM has a Debt to Equity ratio of 3.43. This is in the lower half of the industry: IRDM underperforms 78.13% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.43 | ||
| Debt/FCF | 6.32 | ||
| Altman-Z | 1.41 |
ROIC/WACC0.81
WACC9.35%
2.3 Liquidity
IRDM has a Current Ratio of 1.99. 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 Current ratio of 1.99. This is amongst the best in the industry. IRDM outperforms 84.38% of its industry peers.
IRDM has a Quick Ratio of 1.36. 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 better Quick ratio (1.36) than 75.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.99 | ||
| Quick Ratio | 1.36 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 435.00% over the past year.
Looking at the last year, IRDM shows a small growth in Revenue. The Revenue has grown by 6.64% in the last year.
Measured over the past years, IRDM shows a quite strong growth in Revenue. The Revenue has been growing by 8.19% on average per year.
EPS 1Y (TTM)435%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%68.75%
Revenue 1Y (TTM)6.64%
Revenue growth 3Y10.57%
Revenue growth 5Y8.19%
Sales Q2Q%5.41%
3.2 Future
IRDM is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 29.67% yearly.
Based on estimates for the next years, IRDM will show a small growth in Revenue. The Revenue will grow by 6.39% on average per year.
EPS Next Y14.42%
EPS Next 2Y19.82%
EPS Next 3Y20.33%
EPS Next 5Y29.67%
Revenue Next Year6.44%
Revenue Next 2Y5.27%
Revenue Next 3Y5.49%
Revenue Next 5Y6.39%
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
The Price/Earnings ratio is 29.72, which means the current valuation is very expensive for IRDM.
IRDM's Price/Earnings ratio is in line with the industry average.
The average S&P500 Price/Earnings ratio is at 27.45. IRDM is around the same levels.
With a Price/Forward Earnings ratio of 23.07, IRDM is valued on the expensive side.
The rest of the industry has a similar Price/Forward Earnings ratio as IRDM.
When comparing the Price/Forward Earnings ratio of IRDM to the average of the S&P500 Index (21.90), we can say IRDM is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.72 | ||
| Fwd PE | 23.07 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of IRDM is on the same level as its industry peers.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of IRDM is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.04 | ||
| EV/EBITDA | 12.44 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of IRDM may justify a higher PE ratio.
IRDM's earnings are expected to grow with 20.33% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.06
PEG (5Y)N/A
EPS Next 2Y19.82%
EPS Next 3Y20.33%
5. Dividend
5.1 Amount
IRDM has a Yearly Dividend Yield of 1.90%. Purely for dividend investing, there may be better candidates out there.
IRDM's Dividend Yield is a higher than the industry average which is at 5.16.
Compared to the average S&P500 Dividend Yield of 2.42, IRDM is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.9% |
5.2 History
The dividend of IRDM is nicely growing with an annual growth rate of 69.07%!
IRDM has been paying a dividend for less than 5 years, so it still needs to build a track record.
Dividend Growth(5Y)69.07%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
IRDM pays out 52.09% 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.
DP52.09%
EPS Next 2Y19.82%
EPS Next 3Y20.33%
31.8
+0.28 (+0.89%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupTelecommunication Services
GICS IndustryDiversified Telecommunication Services
Earnings (Last)
Earnings (Next)
Inst Owners95.85%
Inst Owner Change4.04%
Ins Owners2.57%
Ins Owner Change2.06%
Market Cap3.44B
Analysts84
Price Target39.4 (23.9%)
Short Float %12.36%
Short Ratio8.77
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.9% |
Yearly Dividend0.56
Dividend Growth(5Y)69.07%
DP52.09%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)55.99%
Min EPS beat(2)17.47%
Max EPS beat(2)94.51%
EPS beat(4)4
Avg EPS beat(4)42.16%
Min EPS beat(4)3.98%
Max EPS beat(4)94.51%
EPS beat(8)6
Avg EPS beat(8)10.54%
EPS beat(12)9
Avg EPS beat(12)241.42%
EPS beat(16)12
Avg EPS beat(16)285.57%
Revenue beat(2)1
Avg Revenue beat(2)0.94%
Min Revenue beat(2)-0.39%
Max Revenue beat(2)2.26%
Revenue beat(4)2
Avg Revenue beat(4)0.17%
Min Revenue beat(4)-2.34%
Max Revenue beat(4)2.26%
Revenue beat(8)3
Avg Revenue beat(8)-0.69%
Revenue beat(12)6
Avg Revenue beat(12)1.11%
Revenue beat(16)9
Avg Revenue beat(16)1.32%
PT rev (1m)0%
PT rev (3m)-4.46%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-3.75%
EPS NY rev (1m)0%
EPS NY rev (3m)3.86%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.08%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.49%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.72 | ||
| Fwd PE | 23.07 | ||
| P/S | 4.09 | ||
| P/FCF | 12.04 | ||
| P/OCF | 9.41 | ||
| P/B | 6.63 | ||
| P/tB | 10.43 | ||
| EV/EBITDA | 12.44 |
EPS(TTM)1.07
EY3.36%
EPS(NY)1.38
Fwd EY4.33%
FCF(TTM)2.64
FCFY8.31%
OCF(TTM)3.38
OCFY10.63%
SpS7.78
BVpS4.79
TBVpS3.05
PEG (NY)2.06
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.73% | ||
| ROE | 23.83% | ||
| ROCE | 8.57% | ||
| ROIC | 7.61% | ||
| ROICexc | 7.77% | ||
| ROICexgc | 8.43% | ||
| OM | 25.26% | ||
| PM (TTM) | 14.68% | ||
| GM | 72.45% | ||
| FCFM | 33.95% |
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 Turnover0.32
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.43 | ||
| Debt/FCF | 6.32 | ||
| Debt/EBITDA | 4.26 | ||
| Cap/Depr | 38.95% | ||
| Cap/Sales | 9.49% | ||
| Interest Coverage | 2.2 | ||
| Cash Conversion | 87.54% | ||
| Profit Quality | 231.3% | ||
| Current Ratio | 1.99 | ||
| Quick Ratio | 1.36 | ||
| Altman-Z | 1.41 |
F-Score7
WACC9.35%
ROIC/WACC0.81
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)435%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%68.75%
EPS Next Y14.42%
EPS Next 2Y19.82%
EPS Next 3Y20.33%
EPS Next 5Y29.67%
Revenue 1Y (TTM)6.64%
Revenue growth 3Y10.57%
Revenue growth 5Y8.19%
Sales Q2Q%5.41%
Revenue Next Year6.44%
Revenue Next 2Y5.27%
Revenue Next 3Y5.49%
Revenue Next 5Y6.39%
EBIT growth 1Y93.68%
EBIT growth 3Y63.8%
EBIT growth 5Y82.32%
EBIT Next Year136.63%
EBIT Next 3Y39.24%
EBIT Next 5Y28.69%
FCF growth 1Y6.94%
FCF growth 3Y5.48%
FCF growth 5Y30.68%
OCF growth 1Y5.12%
OCF growth 3Y7.47%
OCF growth 5Y13.67%