Iridium Communications (NASDAQ:IRDM) Sets New 52-Week High - Still a Buy?

Key Points

• Iridium Communications hit a new 52-week high, with shares trading as high as $55.17 after closing previously at $43.52, signaling strong recent momentum.
• The biggest driver behind the move is Iridium’s $8 billion acquisition by Rocket Lab, a cash-and-stock deal that aims to create a vertically integrated space communications platform and compete more effectively with SpaceX.
• Despite the deal enthusiasm, there is headline risk from shareholder-law-firm investigations into whether the offer is fair, while analysts still rate the stock a consensus Hold with a $34 price target.

Shares of Iridium Communications Inc (NASDAQ:IRDM - Get Free Report) reached a new 52-week high on Tuesday . The stock traded as high as $55.17 and last traded at $54.59, with a volume of 12994251 shares. The stock had previously closed at $43.52.

Key Iridium Communications News

Here are the key news stories impacting Iridium Communications this week:

• Positive Sentiment: Iridium agreed to be acquired by Rocket Lab in an $8 billion cash-and-stock transaction, giving shareholders cash plus Rocket Lab shares and creating a vertically integrated space communications platform. Reuters: Rocket Lab to buy satellite communications firm Iridium in $8 billion deal
• Positive Sentiment: Investors are betting the combined company could better compete with SpaceX, with Rocket Lab gaining access to Iridium’s satellite fleet and wireless resources. WSJ: Rocket Lab Buys Satellite Operator Iridium in Bid to Challenge SpaceX
• Neutral Sentiment: Several law firms announced investigations into whether the deal gives Iridium shareholders a fair price, adding headline risk but not changing the announced terms. PR Newswire: Shareholder Alert - Ademi LLP investigates whether Iridium is obtaining a fair price
• Negative Sentiment: Those investigations could lead to merger-related litigation or delays, which may create some uncertainty around closing. GlobeNewswire: Johnson Fistel Investigates Proposed Sale of Iridium Communications

Wall Street Analysts Forecast Growth

A number of research firms have commented on IRDM. Oppenheimer boosted their price target on shares of Iridium Communications from $48.00 to $60.00 and gave the stock an "outperform" rating in a research report on Wednesday, June 3rd. Raymond James Financial reiterated a "market perform" rating on shares of Iridium Communications in a report on Friday, April 24th. New Street Research assumed coverage on Iridium Communications in a report on Thursday, May 14th. They set a "neutral" rating and a $40.00 target price on the stock. Barclays boosted their target price on Iridium Communications from $25.00 to $36.00 and gave the stock an "overweight" rating in a report on Thursday, April 9th. Finally, William Blair lowered Iridium Communications from an "outperform" rating to a "market perform" rating in a research note on Monday. Two equities research analysts have rated the stock with a Buy rating, five have issued a Hold rating and one has issued a Sell rating to the stock. Based on data from MarketBeat, Iridium Communications has an average rating of "Hold" and a consensus price target of $34.00.

Iridium Communications Stock Performance

The company has a debt-to-equity ratio of 3.74, a current ratio of 2.85 and a quick ratio of 2.21. The firm has a market capitalization of $5.77 billion, a PE ratio of 55.14, a P/E/G ratio of 2.94 and a beta of 0.88. The firm has a fifty day moving average price of $44.51 and a 200 day moving average price of $30.68.

Iridium Communications (NASDAQ:IRDM - Get Free Report) last issued its quarterly earnings results on Thursday, April 23rd. The technology company reported $0.20 earnings per share for the quarter, missing analysts' consensus estimates of $0.27 by ($0.07). Iridium Communications had a return on equity of 22.76% and a net margin of 12.05%.The company had revenue of $219.06 million during the quarter, compared to analysts' expectations of $218.39 million. During the same period in the prior year, the business posted $0.27 EPS. The company's revenue for the quarter was up 2.0% compared to the same quarter last year. Research analysts anticipate that Iridium Communications Inc will post 1.05 earnings per share for the current fiscal year.

Iridium Communications Dividend Announcement

The company also recently declared a quarterly dividend, which will be paid on Tuesday, June 30th. Stockholders of record on Monday, June 15th will be issued a dividend of $0.15 per share. The ex-dividend date is Monday, June 15th. This represents a $0.60 dividend on an annualized basis and a dividend yield of 1.1%. Iridium Communications's payout ratio is currently 60.61%.

Insider Buying and Selling

In related news, CAO Timothy Kapalka sold 3,790 shares of the firm's stock in a transaction that occurred on Thursday, April 2nd. The shares were sold at an average price of $31.00, for a total value of $117,490.00. Following the completion of the transaction, the chief accounting officer owned 47,764 shares of the company's stock, valued at approximately $1,480,684. This trade represents a 7.35% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Corporate insiders own 2.70% of the company's stock.

Institutional Trading of Iridium Communications

Hedge funds have recently modified their holdings of the business. Vanguard Group Inc. grew its holdings in shares of Iridium Communications by 7.1% during the fourth quarter. Vanguard Group Inc. now owns 10,157,227 shares of the technology company's stock valued at $176,533,000 after buying an additional 677,258 shares in the last quarter. ARK Investment Management LLC lifted its stake in Iridium Communications by 21.7% in the 3rd quarter. ARK Investment Management LLC now owns 6,490,108 shares of the technology company's stock worth $113,317,000 after acquiring an additional 1,156,580 shares in the last quarter. Silver Heights Capital Management Inc lifted its stake in Iridium Communications by 1.2% in the 4th quarter. Silver Heights Capital Management Inc now owns 5,251,133 shares of the technology company's stock worth $91,265,000 after acquiring an additional 61,430 shares in the last quarter. State Street Corp boosted its position in Iridium Communications by 18.0% during the 4th quarter. State Street Corp now owns 4,761,749 shares of the technology company's stock worth $82,759,000 after acquiring an additional 725,856 shares during the period. Finally, Millennium Management LLC boosted its position in Iridium Communications by 265.8% during the 3rd quarter. Millennium Management LLC now owns 3,039,731 shares of the technology company's stock worth $53,074,000 after acquiring an additional 2,208,857 shares during the period. Hedge funds and other institutional investors own 84.36% of the company's stock.

About Iridium Communications

Iridium Communications Inc operates a global satellite communications network that delivers voice and data services across land, sea and air. The company's unique architecture relies on a constellation of 66 low-Earth orbit satellites, enabling real-time connectivity in regions beyond the reach of terrestrial wireless networks. Iridium's core offerings include satellite voice and messaging services, broadband data terminals, push-to-talk (PTT) interoperability and machine-to-machine (M2M) solutions for the Internet of Things (IoT).

Iridium serves a diverse range of markets, including maritime shipping, aviation, government and defense, energy, and enterprise.

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