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Iridium (IRDM) Surges 6.9%: Is This an Indication of Further Gains?

·2 min read

Iridium Communications IRDM shares rallied 6.9% in the last trading session to close at $37.08. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 3.2% loss over the past four weeks.

Iridium’s performance is benefitting from expanding subscriber base driven by the demand for consumer-oriented devices and higher services’ revenues. Iridium expects commercial service revenues to benefit from growth in IoT, ongoing activations and solid uptake of the company’s broadband services going ahead. It delivers cost-effective broadband services through its Certus technology and shares strategic relationships with government organizations.

This satellite phone company is expected to post break-even quarterly earnings per share in its upcoming report, which represents a year-over-year change of -100%. Revenues are expected to be $164.1 million, up 9.5% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Iridium, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on IRDM going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Iridium is a member of the Zacks Satellite and Communication industry. One other stock in the same industry, Globalstar GSAT, finished the last trading session 4.4% higher at $1.19. GSAT has returned -2.6% over the past month.

Globalstar's consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.01. Compared to the company's year-ago EPS, this represents no change. Globalstar currently boasts a Zacks Rank of #2 (Buy).

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