As of June 13, 2025, Iridium Communications Inc has a Discounted Cash Flow (DCF) derived fair value of $36.65 per share. With the current market price at $29.23, this represents a potential upside of 25.4%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $36.92 |
| DCF Fair Value (10-year) | $36.65 |
| Potential Upside (5-year) | 26.3% |
| Potential Upside (10-year) | 25.4% |
| Discount Rate (WACC) | 5.5% - 7.0% |
Revenue is projected to grow from $831 million in 12-2024 to $1236 million by 12-2034, representing a compound annual growth rate of approximately 4.0%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2024 | 831 | 5% |
| 12-2025 | 885 | 7% |
| 12-2026 | 934 | 5% |
| 12-2027 | 952 | 2% |
| 12-2028 | 1002 | 5% |
| 12-2029 | 1045 | 4% |
| 12-2030 | 1071 | 3% |
| 12-2031 | 1093 | 2% |
| 12-2032 | 1127 | 3% |
| 12-2033 | 1160 | 3% |
| 12-2034 | 1236 | 7% |
Net profit margin is expected to improve from 12% in 12-2024 to 8% by 12-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2024 | 98 | 12% |
| 12-2025 | 74 | 8% |
| 12-2026 | 78 | 8% |
| 12-2027 | 79 | 8% |
| 12-2028 | 83 | 8% |
| 12-2029 | 87 | 8% |
| 12-2030 | 89 | 8% |
| 12-2031 | 91 | 8% |
| 12-2032 | 94 | 8% |
| 12-2033 | 97 | 8% |
| 12-2034 | 103 | 8% |
with a 5-year average of $59 million. Projected CapEx is expected to maintain at approximately 8% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2025 | 66 |
| 12-2026 | 73 |
| 12-2027 | 74 |
| 12-2028 | 76 |
| 12-2029 | 79 |
| 12-2030 | 82 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 43 |
| Days Inventory | 116 |
| Days Payables | 39 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 9M/2025 | 210 | 32 | 55 | (5) | 128 |
| 2026 | 299 | 46 | 77 | 20 | 156 |
| 2027 | 305 | 47 | 78 | 1 | 178 |
| 2028 | 318 | 49 | 82 | 7 | 180 |
| 2029 | 332 | 51 | 86 | 11 | 184 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 36.92 | 26.3% |
| 10-Year DCF (Growth) | 36.65 | 25.4% |
| 5-Year DCF (EBITDA) | 31.90 | 9.1% |
| 10-Year DCF (EBITDA) | 32.55 | 11.4% |
Is Iridium Communications Inc (IRDM) a buy or a sell? Iridium Communications Inc is definitely a buy. Based on our DCF analysis, Iridium Communications Inc (IRDM) appears to be significantly undervalued with upside potential of 25.4%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a strong buy at the current market price of $29.23.