May 23, 2024
Top 10 Stock Iridium Communications Hold Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Iridium Communications – Top 10 Stock in Dow Jones U.S. Telecommunications Index
Iridium Communications is listed as a top 10 stock on May 23, 2024 in the market index D.J. US Telecom because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. The company is growing above average and professional investor sentiment is positive. Both are encouraging signals for a stock purchase decision, albeit at an above-average share price. Based on the Obermatt 360° View of 32 (32% performer), Obermatt assesses an overall hold recommendation for Iridium Communications on May 23, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Alternative Carriers |
| Index | NASDAQ, D.J. US Telecom |
| Size class | Medium |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Iridium Communications Hold
| 360 METRICS | May 23, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 6 |
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| GROWTH | ||||||||
| GROWTH | 59 |
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| SAFETY | ||||||||
| SAFETY | 31 |
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| SENTIMENT | ||||||||
| SENTIMENT | 70 |
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| 360° VIEW | ||||||||
| 360° VIEW | 32 |
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ANALYSIS: With an Obermatt 360° View of 32 (better than 32% compared with alternatives), overall professional sentiment and financial characteristics for the stock Iridium Communications are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Iridium Communications. The consolidated Growth Rank has a good rank of 59, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. This means that growth is higher than for 59% of competitors in the same industry. The consolidated Sentiment Rank also has a good rank of 70, which means that professional investors are more optimistic about the stock than for 70% of alternative investment opportunities. But the consolidated Value Rank has a less desirable rank of 6, which means that the share price of Iridium Communications is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 94% of alternative stocks in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 31, which means that the company has a financing structure that is riskier than those of 69% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 32, Iridium Communications is worse than 68% of all alternative stock investment opportunities based on the Obermatt Method. Only half of the consolidated Obermatt Ranks exhibit excellent performance, so one needs to take a close look. Growth is above-average (Growth Rank of 59), and professional market sentiment is positive (Sentiment Rank of 70), but value and safety are below average. The Safety Rank is the least significant of the four consolidated ranks, because it only reflects financing practices. In the case of high growth, aggressive financing is a good thing. So the question is: How to assess below-average value against above-average growth and sentiment? Growth may be the strongest driver of the investment rationale in this case, which is reflected in institutional investors' opinions. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much do you sacrifice value for growth? You can use the following rule of thumb: If you take 100 minus the growth rank, you arrive at a possibly minimum level for the value rank. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value if the growth rank is above 60. Sometimes market sentiment just extrapolates the past, but sometimes it reflects reality. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for Iridium Communications positive
ANALYSIS: With an Obermatt Sentiment Rank of 70 (better than 70% compared with alternatives), overall professional sentiment and engagement for the stock Iridium Communications is above average. The Sentiment Rank is based on consolidating four sentiment indicators where all but one are above average for Iridium Communications. Analyst Opinions are at a rank of 75 (better than 75% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. The Professional Investors rank is also good at 63, which means that currently, professional investors hold more stock in this company than in 63% of alternative investment opportunities. Pros tend to favor investing in this company. In addition, Market Pulse has a rank of 72 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 72% of competitors). But Analyst Opinions Change has a below-average rank of 29, which means that stock research experts are currently changing their opinions for the worse when it comes to recommending this stock. In other words, they are getting more critical of investments in Iridium Communications. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 70 (more positive than 70% compared with investment alternatives), Iridium Communications has a reputation among professional investors that is above-average compared with that of its competitors. This is an early sign of caution, even if the stock has significantly appreciated. If analysts change their opinions, the stock may become too expensive. If the price is on the way down, the trend may continue. This may be a stock with a good reputation and history, but it may have reached its breaking point by now. Investors should look at the Value Ranks as well. If they indicate trouble, it might just materialize in the future. ...read more
Value Strategy: Iridium Communications Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 6 (worse than 94% compared with alternatives), Iridium Communications shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Iridium Communications. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 62% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 3 which means that the stock price compared with what market professionals expect for future profits is higher than 97% of comparable companies, indicating a low value concerning Iridium Communications's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 4 which means that the stock price compared with what market professionals expect for future profit levels is higher than 96% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 6 is also low. Compared with invested capital, the stock price is higher than for 94% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 6, is a sell recommendation based on Iridium Communications's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Iridium Communications? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Iridium Communications only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: Iridium Communications Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 59 (better than 59% compared with alternatives), Iridium Communications shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, where half of the indicators are below and half above average for Iridium Communications. Profit Growth, with a rank of 98 (better than 98% of its competitors), and Capital Growth, with a rank of 51, are both positive, which is a healthy sign for positive development. But Sales Growth has only a rank of 41, which means that, currently, professionals expect the company to grow less than 59% of its competitors, and Stock Returns are at a rank of 12. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 59, is a buy recommendation for growth and momentum investors. Stock returns that are a thing of the past can be less of a problem. Below-average revenue growth may be caused by divestments of underperforming businesses. If that is the case, then the positive developments of profit and capital growth are signs of a company with growth potential. If these are the reasons, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: Iridium Communications Debt Financing Safety below-average
| SAFETY METRICS | May 23, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 36 |
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| REFINANCING | ||||||||
| REFINANCING | 59 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 31 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 31 |
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ANALYSIS: With an Obermatt Safety Rank of 31 (better than 31% compared with alternatives), the company Iridium Communications has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Iridium Communications is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Iridium Communications and the other two below average. Refinancing is at 59, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 59% of its competitors. But Leverage is high with a rank of 36, meaning the company has an above-average debt-to-equity ratio. It has more debt than 64% of its competitors. Liquidity is also on the riskier side with a rank of 31, meaning the company generates less profit to service its debt than 69% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 31 (worse than 69% compared with alternatives), Iridium Communications has a financing structure that is riskier than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for Iridium Communications are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. ...read more
Combined financial peformance: Iridium Communications Lowest Financial Performance
| COMBINED PERFORMANCE | May 23, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 6 |
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| GROWTH | ||||||||
| GROWTH | 59 |
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| SAFETY | ||||||||
| SAFETY | 31 |
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| COMBINED | ||||||||
| COMBINED | 12 |
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ANALYSIS: With an Obermatt Combined Rank of 12 (worse than 88% compared with investment alternatives), Iridium Communications (Alternative Carriers, USA) shares have lower financial characteristics compared with similar stocks. Shares of Iridium Communications are low in value (priced high) with a consolidated Value Rank of 6 (worse than 94% of alternatives), and are riskily financed (Safety Rank of 31, which means above-average debt burdens) but show above-average growth (Growth Rank of 59). ...read more
RECOMMENDATION: A Combined Rank of 12, is a sell recommendation based on Iridium Communications's financial characteristics. As the company Iridium Communications shows low value with an Obermatt Value Rank of 6 (94% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 59% of comparable companies (Obermatt Growth Rank is 59). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 31 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Iridium Communications, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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