Reasons to Retain Iridium (IRDM) Stock in Your Portfolio
Iridium Communications Inc IRDM performance is benefiting from its expanding subscriber base driven by the demand for consumer-oriented devices and higher services revenues.
The company has an impressive Growth Score of A. This style score condenses all the essential metrics from a company’s financial statements to get a true sense of the quality and sustainability of its growth.
Iridium’s 2022 earnings are expected to increase to earnings of 9 cents per share against a loss of 7 cents reported in the previous year. For 2023, earnings are expected to increase 133.3% year over year. Revenues are anticipated to rise 10.2% and 4.6% in 2022 and 2023, respectively.
Iridium outpaced estimates in all of the trailing four quarters, delivering an earnings surprise of 109.4%, on average.
Iridium reported first-quarter 2022 earnings of 2 cents per share. The company had reported a loss of 4 cents in the prior-year quarter. Quarterly revenues of $168.2 million, increasing 15% from the year-ago quarter’s levels. The upside can be attributed to strength in subscriber equipment sales and higher service revenues.
Iridium Communications Inc Price
Iridium Communications Inc price | Iridium Communications Inc Quote
Amid the ongoing volatility, Iridium stock has been more resilient compared with the Zacks sub-industry it belongs to. The stock has lost 6.4% in the past year compared with a 24% plunge of the industry.
IRDM stock is down 23.5% from its 52-week high level of $48.95 on Sep 7, 2021, making it relatively affordable for investors.
The company has a robust share repurchase plan in place. In the last reported quarter, the company repurchased 3.8 million shares worth $134.2 million. On Mar 7, 2022, Iridium’s board of directors approved a new share repurchase authorization of an additional $300 million through Dec 31, 2023. As of Mar 31, 2022, the company had $302.5 million under its repurchase authorization.
Strong Fundamentals
Headquartered in McLean, VA, Iridium is a 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. The company also offers commercial satellite communication services to the U.S. and foreign governments and other non-governmental organizations.
Iridium’s cost-effective broadband services, provided through the Certus technology, position it well for growth. The company is gaining from the increasing penetration of its new line-up of mid-band services. The company’s recurring service revenue base, driven by robust subscriber growth and mobile penetration, lends it a competitive edge.
Continued momentum in commercial IoT business (particularly personal satellite communications) and broadband business is another tailwind.
However, supply chain disruptions are a major headwind. Stiff competition from regional market suppliers restricts its potential to attract new customers. Higher costs and increased lead time to obtain spectrum licenses added concerns for this Zacks Rank #3 (Hold) stock.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks to Consider
Some better-ranked stocks from the broader technology sector worth consideration are InterDigital IDCC, PTC PTC and Vishay Intertechnology VSH. While PTC and InterDigital sport a Zacks Rank #1, Vishay Intertechnology carries a Zacks Rank #2.
The Zacks Consensus Estimate for Vishay Intertechnology’s 2022 earnings is pegged at $2.68 per share, rising 10.3% in the past 60 days. The long-term earnings growth rate is anticipated to be 22.7%.
Vishay Intertechnology’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average surprise being 5%. Shares of VSH have declined 19.2% in the past year.
The Zacks Consensus Estimate for InterDigital 2022 earnings is pegged at $3.33 per share, up 46.1% in the past 60 days. IDCC’s long-term earnings growth rate is pegged at 15%.
InterDigital’s earnings beat the Zacks Consensus Estimate in all the preceding four quarters, with the average being 141.1%. Shares of IDCC have lost 15.3% of their value in the past year.
The Zacks Consensus Estimate for PTC’s fiscal 2022 earnings is pegged at $4.55 per share, rising 2.9% in the past 60 days. The long-term earnings growth rate is anticipated to be 11.8%.
PTC’s earnings beat the Zacks Consensus Estimate in all of the last four quarters, the average being 29.4%. Shares of PTC are down 24.7% in the past year.
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