IRDM
Iridium Communications Inc.
$48.84
Platform & Compounding FCF
75%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 65.8% above fair value
You pay
$48.84
Bear
$20.61
Fair
$29.46
Bull
$37.53
Bear
$20.61
-57.8%
4% stage 1 growth, 11% discount
Fair
$29.46
-39.7%
7% stage 1 growth, 11% discount
Bull
$37.53
-23.2%
9% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (7% base case)
Terminal Value % of EV
36%
Implied Market Multiple
26.1x
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $37.00 from 13 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $29.46 per share.
Warnings
Stock-based employee pay equals 45% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $37.00 (from 13 analysts). Our estimate is 25% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions