IRIDIUM COMMUNICATIONS INC (IRDM) Stock Fundamental Analysis
NASDAQ:IRDM - Nasdaq - US46269C1027 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to IRDM. IRDM was compared to 33 industry peers in the Diversified Telecommunication Services industry. IRDM has an excellent profitability rating, but 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.
IRDM had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
IRDM has a better Return On Assets (4.73%) than 75.76% of its industry peers.
The Return On Equity of IRDM (23.83%) is better than 90.91% of its industry peers.
IRDM's Return On Invested Capital of 7.61% is amongst the best of the industry. IRDM outperforms 84.85% of its industry peers.
IRDM had an Average Return On Invested Capital over the past 3 years of 4.17%. This 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
The Profit Margin of IRDM (14.68%) is better than 81.82% of its industry peers.
Looking at the Operating Margin, with a value of 25.26%, IRDM belongs to the top of the industry, outperforming 90.91% of the companies in the same industry.
In the last couple of years the Operating Margin of IRDM has grown nicely.
IRDM's Gross Margin of 72.45% is amongst the best of the industry. IRDM outperforms 84.85% of its industry peers.
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.
IRDM has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, IRDM has a worse debt to assets ratio.
2.2 Solvency
IRDM has an Altman-Z score of 1.42. This is a bad value and indicates that IRDM is not financially healthy and even has some risk of bankruptcy.
IRDM has a better Altman-Z score (1.42) than 78.79% of its industry peers.
IRDM has a debt to FCF ratio of 6.32. This is a slightly negative value and a sign of low solvency as IRDM would need 6.32 years to pay back of all of its debts.
The Debt to FCF ratio of IRDM (6.32) is better than 81.82% of its industry peers.
IRDM has a Debt/Equity ratio of 3.43. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 3.43, IRDM is doing worse than 78.79% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.43 | ||
| Debt/FCF | 6.32 | ||
| Altman-Z | 1.42 |
ROIC/WACC0.98
WACC7.8%
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.
With an excellent Current ratio value of 1.99, IRDM belongs to the best of the industry, outperforming 84.85% of the companies in the same industry.
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 75.76% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.99 | ||
| Quick Ratio | 1.36 |
3. Growth
3.1 Past
IRDM shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 435.00%, which is quite impressive.
IRDM shows a small growth in Revenue. In the last year, the Revenue has grown by 6.64%.
The Revenue has been growing by 8.19% on average over the past years. This is quite good.
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
The Earnings Per Share is expected to grow by 29.67% on average over the next years. This is a very strong growth
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 29.39, which means the current valuation is very expensive for IRDM.
IRDM's Price/Earnings ratio is a bit cheaper when compared to the industry. IRDM is cheaper than 60.61% of the companies in the same industry.
When comparing the Price/Earnings ratio of IRDM to the average of the S&P500 Index (27.30), we can say IRDM is valued inline with the index average.
A Price/Forward Earnings ratio of 22.82 indicates a rather expensive valuation of IRDM.
Compared to the rest of the industry, the Price/Forward Earnings ratio of IRDM is on the same level as its industry peers.
When comparing the Price/Forward Earnings ratio of IRDM to the average of the S&P500 Index (21.76), we can say IRDM is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.39 | ||
| Fwd PE | 22.82 |
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.
The rest of the industry has a similar Price/Free Cash Flow ratio as IRDM.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.9 | ||
| EV/EBITDA | 12.51 |
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 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)2.04
PEG (5Y)N/A
EPS Next 2Y19.82%
EPS Next 3Y20.33%
5. Dividend
5.1 Amount
IRDM has a Yearly Dividend Yield of 1.75%.
Compared to an average industry Dividend Yield of 5.05, IRDM pays a bit more dividend than its industry peers.
IRDM's Dividend Yield is slightly below the S&P500 average, which is at 2.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.75% |
5.2 History
On average, the dividend of IRDM grows each year by 69.07%, which is quite nice.
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.
IRDM's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP52.09%
EPS Next 2Y19.82%
EPS Next 3Y20.33%
31.45
-0.61 (-1.9%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupTelecommunication Services
GICS IndustryDiversified Telecommunication Services
Earnings (Last)
Earnings (Next)
Inst Owners95.85%
Inst Owner Change0%
Ins Owners2.57%
Ins Owner Change1.56%
Market Cap3.40B
Analysts84
Price Target39.4 (25.28%)
Short Float %12.36%
Short Ratio8.77
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.75% |
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)0.26%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.39 | ||
| Fwd PE | 22.82 | ||
| P/S | 4.04 | ||
| P/FCF | 11.9 | ||
| P/OCF | 9.3 | ||
| P/B | 6.56 | ||
| P/tB | 10.32 | ||
| EV/EBITDA | 12.51 |
EPS(TTM)1.07
EY3.4%
EPS(NY)1.38
Fwd EY4.38%
FCF(TTM)2.64
FCFY8.4%
OCF(TTM)3.38
OCFY10.75%
SpS7.78
BVpS4.79
TBVpS3.05
PEG (NY)2.04
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 | 1.42 |
F-Score7
WACC7.8%
ROIC/WACC0.98
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%