Iridium Communications Inc. (IRDM)
Valuation Overview•Is Iridium Communications Inc. Overvalued or Undervalued?
Trading at a discount compared to peers, but the underlying intrinsic cash flows struggle to support the current price.
Moderate quality score of 70/100, reflecting stable operating margins and manageable leverage.
Wall Street forecasts a balanced outlook with consensus price targets near the current price.
Verdict: Solid fundamental quality, though solvency presents a headwind.
Wall Street sentiment is generally neutral alongside robust expected earnings growth. This outlook is strongly supported by highly attractive capital returns, driven predominantly by aggressive share repurchases.
IRDM demonstrates strong business quality with robust profitability and healthy margins. However, the balance sheet carries elevated leverage, requiring careful monitoring of debt servicing capabilities.
The company demonstrates solid revenue growth (6.5% 3Y CAGR) paired with highly explosive earnings growth (151.0% EPS 3Y CAGR). This growth is supported by elite operational efficiency, sustaining an impressive 25.8% operating margin.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $219.1M | +4.9% | +6.5% | +8.4% | +7.8% | |
| EBITDA | $104.5M | — | +5.5% | — | — | |
| Net Income | $21.6M | +1.4% | +135.8% | — | +32.0% | |
| EPS (Diluted) | $0.20 | +12.8% | +151.0% | — | — | |
| Free Cash Flow | $41.7M | +53.5% | +10.3% | +7.3% | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 62.5% | 53.6% | 43.4% | 40.1% |
| Operating Margin | 25.8% | 22.2% | 17.0% | 16.4% |
| Net Margin | 12.1% | 9.5% | 5.7% | 6.5% |
| FCF Margin | 34.8% | 29.5% | 32.4% | 11.5% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $0.27 | $0.20 | -25.9% | ||
| Q1'26 | $0.23 | $0.24 | +4.3% | ||
| Q4'25 | $0.26 | $0.35 | +34.6% | ||
| Q3'25 | $0.23 | $0.20 | -13.0% | ||
| Q2'25 | $0.22 | $0.27 | +22.7% | ||
| Q1'25 | $0.15 | $0.31 | +106.7% | ||
| Q4'24 | $0.20 | $0.21 | +5.0% | ||
| Q3'24 | $0.17 | $0.27 | +58.8% |
Total return is +57.2% (1Y), outperforming the benchmark by +32.2%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | +152.6% | +143.3% | — |
| 1Y | +57.2% | +32.2% | +2.1% |
| 3YCAGR | -9.2% | -28.4% | +2.7% |
| 5YCAGR | +3.4% | -9.9% | +5.0% |
| 10YCAGR | +18.5% | +5.2% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about Iridium Communications Inc. (IRDM) valuation, health, and returns.
Iridium Communications Inc. is estimated to be overvalued under our discounted cash flow framework. relative multiples indicate the stock is Limited: Slightly cheap versus peers compared to industry peers. overvalued (implying -41.6% downside from DCF intrinsic value of $26.02)
Iridium Communications Inc. has multiple valuation anchors: DCF Intrinsic Value: $26.02 | Peer Relative Fair Value: $50.85 | Wall Street Analyst Target: $42.75 (implying -4.1% upside). A convergence of these signals offers higher conviction.
Iridium Communications Inc. displays good financial health with a composite quality score of 70/100, supported by a Piotroski F-Score of 8/9, Return on Invested Capital (ROIC) of 8.0%.
Iridium Communications Inc. pays a 1.3% dividend yield, covered by a 55% payout ratio with 3 years of growth, supplemented by a 4.0% buyback yield.
Iridium Communications Inc.'s current growth trajectory is Stable. The company achieved +4.9% 1Y revenue growth and +12.8% 1Y EPS growth, compared to its 3Y revenue CAGR of +6.5%.
Wall Street consensus is Buy based on 14 analysts, beating EPS expectations in 67% of recent quarters with a -1-quarter streak. The consensus price target represents a -4.1% change from current levels.
Investment risks for Iridium Communications Inc. include: -51.2% 1-year max drawdown. Volatility risk is characterized by a beta of 1.18x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.