Technicals Say Iridium Communications Inc. (IRDM) Is A Hold

Iridium Communications Inc. (NASDAQ:IRDM) finished Friday with a subtraction of -$0.69 to close at $40.54, a downside of -1.67 percent. An average of 785,100 shares of common stock have been traded in the last five days. There was a gain of $1.31 in the past week, and it reached a new high 35 times over the past 12 months. The last 20 days have seen an average of 737,290 shares traded, while the 50-day average volume stands at 797,560.

IRDM stock has decreased by -6.14% in the last month. The company shares reached their 1-month lowest point of $36.34 on 10/11/21. With the stock rallying to its 52-week high on 02/08/21, shares of the company touched a low of $25.30 and a high of $54.65 in 52 weeks. It has reached a new high 11 times so far this year and achieved 3.09% or $1.22 in price. In spite of this, the price is down -25.82% from the 52-week high.

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Insider Transactions

46 days have passed since Iridium Communications Inc. (IRDM) last reported insider trading activity. Kapalka Timothy, who is VP Iridium Satellite LLC, most recently acquired $2,112 shares at $48.00 per share on Sep 07. In this transaction, the insider spent $101,376. VP Iridium Satellite LLC, Kapalka Timothy, disposed of 2,070 shares at a price of $46.00 on Aug 30. The insider now owns more than $95,220 worth of shares. Prior to that, VP Iridium Satellite LLC Kapalka Timothy went on to Sale 400 shares at $44.00 each on Aug 05. An amount of $17,600 was transacted.

Valuation Metrics

Iridium Communications Inc. (IRDM) has a trailing price-to-earnings (P/E) ratio of 17.20 for the broader industry and 30.57 for the sector. In the last five years, Iridium Communications Inc.’s PE ratio has ranged between 18.80 and 5.198. The stock’s beta is 1.12. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 8.93, the price-to-book (PB) ratio at 4.12, and the price-to-cash flow ratio at 22.90.

The quick ratio of Iridium Communications Inc. for the three months ended June 29 was 3.40, and the current ratio was 3.70, indicating that the company is able to meet its debt obligations. Further, the company has a long term debt to equity ratio of 1.21 and a total debt to equity ratio of 1.22 for the quarter ending June 29. Iridium Communications Inc.’s EBITDA margin for the year ending June 29 is 58.04%, while its operating margin for the same period stands at 6.50%. Its gross profit as reported stood at $440.75 million compared to revenue of $583.44 million.

For investors, determining the potential profitability of the investment also depends on the performance of the company’s management. In the past 12 months, Iridium Communications Inc.’s return on assets was -0.40%. For the broader industry, ROE averaged 4.52 over the past year.

Earnings Surprise

For the three-month period that ended June 29, Iridium Communications Inc. had $2.0 million in cash and short-term investments compared to $1.58 billion in total debt. In the quarter under review, the net income was up than the previous quarter. The company posted a net income of -$2.09 million in the quarter, while revenues of $3.83 million were shrunk -494.26%. The analyst consensus anticipated Iridium Communications Inc.’s latest quarter earnings to come in at -$0.06 per share, but it turned out to be $0.03, a 150.00% surprise. For the quarter, EBITDA amounted to $93.83 million. Shareholders own equity worth $132.2 million.

Technical Picture

From a technical analysis perspective, let’s take a brief look at Iridium Communications Inc. (IRDM) price momentum. RSI 9-day as of the close on 22 October was 53.04%, suggesting the stock is Neutral, with historical volatility in this time frame at 22.99%.

As of today, IRDM’s price is $40.82 +3.34% or $1.31 from its 5-day moving average. IRDM is currently trading -5.90% lower than its 20-day SMA and +6.66% higher than its 100-day SMA. However, the stock’s current price level is -4.25% below the SMA50 and -4.86% below the SMA200.

The stochastic %K and %D were 71.83% and 76.55%, respectively, and the average true range (ATR) was 1.51. With the 14-day stochastic at 60.17% and the average true range at 1.52, the RSI (14) stands at 49.64%. The stock has reached 1.29 on the 9-day MACD Oscillator while the 14-day reading was at 2.05.

Analyst Ratings

BWS Financial upgraded Iridium Communications Inc. (NASDAQ: IRDM) to a a Buy rating in its most recent analyst report. Previously, the stock was rated as a Neutral. The consensus rating for Iridium Communications Inc. (IRDM) among analysts is Overweight. According to current brokerage recommendations, 0 brokerage firms advise that investors sell IRDM, while 2 suggest investors hold. There are 0 analysts who rate the stock as underweight. The stock is rated overweight by 2 analysts, while 2 others rate it as a “buy”.

What is IRDM’s price target for the next 12 months?

Analysts predict a range of price targets between $42.00 and $60.00, with a median target of $47.00. Taking a look at these predictions, the average price target given by analysts for Iridium Communications Inc. (IRDM) stock is $48.60.


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