Iridium (IRDM) Stock Surges 18% YTD: Will the trend Continue?
Iridium Communications IRDM witnessed strong momentum this year, with shares soaring 18% year to date against the sub-industry’s decline of 8.5%.
Iridium is a leading satellite communications company that offers dedicated commercial global voice and data communications. The company delivers reliable and low-latency communications services to businesses, consumers, wireline and wireless telecommunications operators and Internet service providers.
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Catalysts Behind the Price Surge
Let’s delve deeper to unearth the factors working in favor of this Zacks Rank #3 (Hold) stock.
The company’s performance benefits from higher subscriber equipment and engineering and support revenues. The engineering and support service business segment benefits from increased activity across both commercial and government, including a Space Development Agency contract. The company expects U.S. government business to produce revenues of $106 million in 2023.
The company’s aviation segment is likely to benefit from the ongoing transition to Iridium cert as mid-band from traditional narrowband voice safety data and Internet of Things (IoT) services. Iridium expects commercial service revenues to benefit from growth in IoT, ongoing activations and solid uptake of the company’s broadband services. For 2023, the company expects total service revenue growth between 9% and 11%.
The company aims to tap the consumer-oriented satellite segment by launching new satellite direct-to-device capabilities. The recent collaboration with Qualcomm for satellite messaging and emergency services in smartphones is a major tailwind.
The company reported earnings per share (EPS) of 8 cents for first-quarter 2023, which handily beat the Zacks Consensus Estimate of a loss of 2 cents. The company had reported EPS of 2 cents in the prior-year quarter. Quarterly revenues were $205.3 million, up 22% from the year-ago quarter. The top line surpassed the Zacks Consensus Estimate by 9.9%.
Apart from having solid fundamentals, IRDM has a Growth Score of A. This style score consolidates all the essential metrics from a company’s financial
statements to get a true sense of the quality and sustainability of its growth.
Despite solid demand, the company is prone to several risks. Stiff competition and weakness in global macroeconomic conditions are likely to weigh on the company’s performance in the near term.
Stocks to Consider
Some better-ranked stocks in the broader technology space are InterDigital IDCC, Badger Meter BMI and Woodward WWD. InterDigital and Woodward sport a Zacks Rank #1 (Strong Buy), while Badger Meter carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for InterDigital’s 2023 earnings per share (EPS) has increased 62.6% in the past 60 days to $8.08. The company’s long-term earnings growth rate is 13.9%.
InterDigital’s earnings beat estimates in all the trailing four quarters, delivering an average surprise of 170.9%. Shares of IDCC have rallied 52% in the past year.
The Zacks Consensus Estimate for Badger Meter’s 2023 EPS has increased 1.1% in the past 60 days to $2.72.
Badger Meter’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 5.3%. Shares of BMI have surged 81.3% in the past year.
The Zacks Consensus Estimate for Woodward’s fiscal 2023 EPS has increased 3.8% in the past 60 days to $3.58.
WWD’s long-term earnings growth rate is 13.5%. Shares of WWD have gained 12% in the past year.
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Badger Meter, Inc. (BMI) : Free Stock Analysis Report
InterDigital, Inc. (IDCC) : Free Stock Analysis Report
Iridium Communications Inc (IRDM) : Free Stock Analysis Report
Woodward, Inc. (WWD) : Free Stock Analysis Report
