IRIDIUM COMMUNICATIONS INC (IRDM) Stock Fundamental Analysis
NASDAQ:IRDM - Nasdaq - US46269C1027 - Common Stock - Currency: USD
IRDM gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 31 industry peers in the Diversified Telecommunication Services industry. IRDM scores excellent on profitability, but there are some minor concerns on its financial health. IRDM is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year IRDM was profitable.
IRDM had a positive operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: IRDM reported negative net income in multiple years.
In the past 5 years IRDM always reported a positive cash flow from operatings.
1.2 Ratios
IRDM's Return On Assets of 4.22% is fine compared to the rest of the industry. IRDM outperforms 77.42% of its industry peers.
IRDM has a Return On Equity of 19.56%. This is amongst the best in the industry. IRDM outperforms 90.32% of its industry peers.
With an excellent Return On Invested Capital value of 7.22%, IRDM belongs to the best of the industry, outperforming 80.65% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for IRDM is in line with the industry average of 5.74%.
The last Return On Invested Capital (7.22%) for IRDM is above the 3 year average (4.17%), which is a sign of increasing profitability.
| 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
Looking at the Profit Margin, with a value of 13.58%, IRDM belongs to the top of the industry, outperforming 87.10% of the companies in the same industry.
IRDM has a Operating Margin of 24.50%. This is amongst the best in the industry. IRDM outperforms 90.32% of its industry peers.
IRDM's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 72.24%, IRDM belongs to the top of the industry, outperforming 87.10% 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 | 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
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 1.13, we must say that IRDM is in the distress zone and has some risk of bankruptcy.
With a decent Altman-Z score value of 1.13, IRDM is doing good in the industry, outperforming 74.19% of the companies in the same industry.
IRDM has a debt to FCF ratio of 5.85. This is a neutral value as IRDM would need 5.85 years to pay back of all of its debts.
IRDM's Debt to FCF ratio of 5.85 is amongst the best of the industry. IRDM outperforms 80.65% of its industry peers.
A Debt/Equity ratio of 3.05 is on the high side and indicates that IRDM has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 3.05, IRDM is doing worse than 74.19% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.05 | ||
| Debt/FCF | 5.85 | ||
| Altman-Z | 1.13 |
ROIC/WACC0.97
WACC7.48%
2.3 Liquidity
A Current Ratio of 1.73 indicates that IRDM should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.73, IRDM belongs to the top of the industry, outperforming 83.87% of the companies in the same industry.
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's Quick ratio of 1.25 is fine compared to the rest of the industry. IRDM outperforms 67.74% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.73 | ||
| Quick Ratio | 1.25 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 700.00% over the past year.
IRDM shows a small growth in Revenue. In the last year, the Revenue has grown by 5.05%.
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 27.05% yearly.
The Revenue is expected to grow by 5.54% on average over the next years.
EPS Next Y10.17%
EPS Next 2Y20.94%
EPS Next 3Y27.05%
EPS Next 5YN/A
Revenue Next Year6.16%
Revenue Next 2Y5.16%
Revenue Next 3Y5.17%
Revenue Next 5Y5.54%
3.3 Evolution
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 24.17, which indicates a rather expensive current valuation of IRDM.
IRDM's Price/Earnings ratio is in line with the industry average.
IRDM's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.63.
Based on the Price/Forward Earnings ratio of 21.94, the valuation of IRDM can be described as rather expensive.
Based on the Price/Forward Earnings ratio, IRDM is valued a bit cheaper than 64.52% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.85, IRDM is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.17 | ||
| Fwd PE | 21.94 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as IRDM.
Based on the Price/Free Cash Flow ratio, IRDM is valued a bit cheaper than the industry average as 64.52% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.24 | ||
| EV/EBITDA | 10.38 |
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.
The excellent profitability rating of IRDM may justify a higher PE ratio.
IRDM's earnings are expected to grow with 27.05% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.38
PEG (5Y)N/A
EPS Next 2Y20.94%
EPS Next 3Y27.05%
5. Dividend
5.1 Amount
IRDM has a Yearly Dividend Yield of 2.36%.
In the last 3 months the price of IRDM has falen by -25.21%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
IRDM's Dividend Yield is a higher than the industry average which is at 5.12.
IRDM's Dividend Yield is comparable with the S&P500 average which is at 2.51.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.36% |
5.2 History
The dividend of IRDM is nicely growing with an annual growth rate of 69.07%!
IRDM has paid a dividend for less than 5 years, so there is no long track record yet.
Dividend Growth(5Y)69.07%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
57.40% of the earnings are spent on dividend by IRDM. 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 2Y20.94%
EPS Next 3Y27.05%
23.2
-0.57 (-2.4%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupTelecommunication Services
GICS IndustryDiversified Telecommunication Services
Earnings (Last)
Earnings (Next)
Inst Owners91.9%
Inst Owner Change0.12%
Ins Owners2.24%
Ins Owner Change2.04%
Market Cap2.52B
Analysts80
Price Target41.24 (77.76%)
Short Float %10.79%
Short Ratio8.37
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.36% |
Yearly Dividend0.56
Dividend Growth(5Y)69.07%
DP57.4%
Div Incr Years0
Div Non Decr Years0
Ex-Date
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)-2.41%
PT rev (3m)-0.18%
EPS NQ rev (1m)0%
EPS NQ rev (3m)22.46%
EPS NY rev (1m)7.38%
EPS NY rev (3m)7.13%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)2%
Revenue NY rev (1m)0.23%
Revenue NY rev (3m)2.41%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.17 | ||
| Fwd PE | 21.94 | ||
| P/S | 3.04 | ||
| P/FCF | 8.24 | ||
| P/OCF | 6.71 | ||
| P/B | 4.37 | ||
| P/tB | 6.51 | ||
| EV/EBITDA | 10.38 |
EPS(TTM)0.96
EY4.14%
EPS(NY)1.06
Fwd EY4.56%
FCF(TTM)2.81
FCFY12.13%
OCF(TTM)3.46
OCFY14.9%
SpS7.64
BVpS5.3
TBVpS3.56
PEG (NY)2.38
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 | 1.13 |
F-Score7
WACC7.48%
ROIC/WACC0.97
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 Y10.17%
EPS Next 2Y20.94%
EPS Next 3Y27.05%
EPS Next 5YN/A
Revenue 1Y (TTM)5.05%
Revenue growth 3Y10.57%
Revenue growth 5Y8.19%
Sales Q2Q%9.37%
Revenue Next Year6.16%
Revenue Next 2Y5.16%
Revenue Next 3Y5.17%
Revenue Next 5Y5.54%
EBIT growth 1Y149.38%
EBIT growth 3Y63.8%
EBIT growth 5Y82.32%
EBIT Next Year140.97%
EBIT Next 3Y38.96%
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%