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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Iridium Communications Inc. (XNAS:IRDM) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
IRDM
Name:
IRIDIUM COMMUNICATIONS INC. (XNAS:IRDM)
Sector:
52.20M
Industry:
Telecom Services
CEO:
Mr. Matthew Desch
Total Employees:
537
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -84.24% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF IRIDIUM COMMUNICATIONS INC.(IRDM) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND TELECOM SERVICES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
44.02
One Month Price Target:
$44.31
Six Month Price Target :
$45.75
Likely Price in One Year's Time:
Ticker:
$47.48
Likely Trading Range Today Under (Normal Volatility)
$43.85
Price Upper limit ($) :
$44.31
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$41.28
This week:
$37.89
This month :
$31.75
Other Primary facts
Market Cap:
5.98B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
126.97M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
15.41%
-18.41%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$56.74
$50.82
$31.30
$37.22
Medium risk (<10%) entry points
Buy Call
Sell Call
$48.89
Buy Put:
Sell Put:
$47.63
$39.13
$40.41
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
IRDM
Sharpe Ratio:
4.19%
Comparison:
IRDM, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 331.12% higher than the industry
& ratio is 83.91% higher than the market/S&P 500 average
Average Returns/Yield of
IRDM
Daily returns:
0.14%
Weekly returns:
0.69%
Monthly returns:
2.78%
Yearly returns:
17.77%
Comparison of returns:
Average annual returns/yield (last 3 years) is 87.54% above industry average
Classification:
IRDM, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.57
Statistical test of Returns:
IRDM has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.10%
Weekly Volatility:
6.94%
Monthly Volatility:
13.87%
Yearly Volatility:
48.06%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.97%
Volatility in last five trading days has been -68.86% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-6.23%
Weekly VaR:
-13.93%
Monthly VaR:
-27.87%
How Much Can the price of
IRDM
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-23%
Worst case (decline):
>85%
This translates to price declining to:
$33.87
This translates to price declining to:
$6.60
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
IRDM is a 96.70% riskier investment compared to the market/S&P 500 & is 68.51% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -8.98% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
IRDM
Beta in relation to market/S&P 500--1.17
Expected beta in 1 year's time:
0.722
Expected beta in 3 year's time:
1.021
Unlevered (debt free) Beta:
1.003
Beta in relation to Nasdaq (XNAS):
1.046
Beta in relation to all global stocks::
0.964
Beta Comparison & Analysis
Beta of competitors/peers::
1.069
Beta is 9.43% higher than peers
Average Industry Beta:
0.819
Beta is 42.92% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
0.222
Alpha is 145.87% above industry average alpha yield
Alpha is 1411% higher than market/& is unsustainably high
Analysis of Cost of Capital of
IRDM
Equity cost of capital:
0.112
Equity cost of capital is 27.48% above industry mean WACC
Unlevered (without debt) cost of capital:
9.57%
Before-tax cost of debt:
4.12%
After-tax cost of debt:
3.25%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.25%
WACC is 26.11% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$5.01
Revenue growth rate per share of (3Y):
4.69
Annual revenue growth rate is -100.32% below industry average
EPS:
-$0.01
Expected Annual growth rate of EPS (3Y):
-61.87%
Expected future EPS growth rate is -349.80% lower than the Telecom Services industry
Free cash flow (FCF) per share:
$2.09
Balance sheet equity growth per share: -100.00%
Equity growth rate per share is 528.63% higher than the industry
Debt per share
$12.43
EBITDA per share
$2.84
Valuation Analysis Today of
IRDM
P/E Ratio:
137.18
P/E Ratio of Competitors/Peers:
180.98
P/E ratio is -24.20% lower than main peers & is 364.87% higher than the industry
-
IRDM is -15017.91% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
8.79
Price to sales ratio is 40.46% above the industry mean
P/B (Price to book value ratio):
4.69
Price to free cash flow: 21.07
Price to free cash flow ratio is -22.17% lower than the industry
Net income growth rate (3Y):
-41.49%
Net income growth rate is -110.20% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
132.45%
Net debt to equity ratio:
114.37%
Debt to assets ratio:
51.30%
Net debt to assets ratio:
44.29%
Debt-to-asset ratio is -32.90% below industry average
Ability to repay debt:
Interest coverage ratio:
5.48
Interest coverage ratio is 249.38% more than industry average
Looking forward:
Debt growth rate:
0.00%
-
Debt repayment rate in last quarter: 0.26%
Analysis of Key Statistics
Correlation of price movement with the market:
0.606
Statistical significance of correlation:
IRDM has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.461
Stock price is 31.27% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.461
Correlation of price movement with Nasdaq (^IXIC):
-0.005
Covariance of price movement with the market:
-0.008
Kurtosis
4.247
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.209
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
IRDM
Gross Profit Margin Ratio:
300%
Operating Profit Margin Ratio:
8.89%
Operating profit margin is 183.91% higher than the industry
Net Profit Margin Ratio:
300%
Effective Tax Rate:
87.46%
Effective tax rate is 170.96% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
-0.11%
Return on equity (ROE) is -97.13% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
-0.04%
Return on assets (ROA) is -76.60% lower than the industry
Financial Leverage:
2.1x
Current Ratio:
3.67
Current ratio is 127.45% above industry average
Cash Conversion Cycle (days):
15.7
Cash conversion cycle is -77.77% below industry average
The remaining useful life of property plant & equipment is: 1.1 years
Stock based compensation to net income ratio:
-628.05%
In-depth Efficiency Analysis
Revenue generated per employee:
1.2M
Each employee generates 18% more revenue than industry average revenue per employee
EBITDA generated per employee:
671.2K
Each employee generates 95% more EBITDA than industry average revenue per employee
Profit generated per employee:
- 2.4K
Each employee generates -102% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
97.2K
Each employee generates 69% more free cash flow than industry average revenue per employee
Assets/Capital per employee
5.1M
Each employee generates 69% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- -1.26%
Growth rate in R&D investment/expenditure is -92.06% lower than the industry
Competitors/Peer firms of
IRDM
VONAGE HOLDINGS CORP. (XNAS:VG)
NEXSTAR MEDIA GROUP, INC. (XNAS:NXST)
ANGI INC. (XNAS:ANGI)
PLAYTIKA HOLDING CORP. (XNAS:PLTK)
JOYY INC. (XNAS:YY)
CARGURUS, INC. (XNAS:CARG)
iQIYI, Inc. (XNAS:IQ)
COGENT COMMUNICATIONS HOLDINGS, INC. (XNAS:CCOI)
VEON Ltd. (XNAS:VEON)
Current Analyst Ratings
Strong buy�13%
Buy�8%
Hold�13%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Strong buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
636.18M
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
158.76M
477.42M
11.79M
-
103.92M
-
305.18M
420.89M
-
65.71M
305.18M
360.44M
56.53M
- 1312.00K
- 10459.00K
- 9147.00K
- 1312.00K
Statement of Cash Flow
Date:
Period:
75.66M
Differed Income Tax :
1.16M
Stock Based Compensation :
8.24M
Change in Working Capital :
- 23440.00K
Accounts Receivables:
- 16540.00K
Other Working Capital:
644.00K
Other Non-Cash Items:
1.33M
Net Cash Provided by Operating Activities:
65.77M
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
232.02M
-
232.02M
80.06M
28.24M
11.11M
351.42M
2.60B
-
-
-
-
86.43M
2.73B
-
3.08B
15.10M
16.50M
-
28.91M
35.18M
95.69M
1.58B
19.20M
1.79B
-
1.89B
128.00K
42.92M
22.2M
-
March 31, 2022 at 6:00:00 AM
579.65M
1.19B
3.08B
-
1.60B
1.4B
-
- 13568.00K
- 13568.00K
- 4125.00K
-
- 134166.00K
-
- 3035.00K
- 141326.00K
226.00K
- 88898.00K
232.02M
320.91M
65.77M
- 13568.00K
52.20M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
IRDM
2023
2024
2025
2026
2027
$41.24
$44.48
$47.98
$51.75
$55.82