Raymond James Lowers Iridium Communications' Price Target to $39, Maintains "Strong Buy" Rating

Raymond James has lowered its price target for Iridium Communications (IRDM) from $47 to $39, a 17% decrease, while maintaining a "Strong Buy" rating. The average analyst target price is $37.63, with an average upside of 51% from the current price. The average brokerage recommendation is 1.8, indicating an "Outperform" status. The estimated GF Value for IRDM in one year is $51.94, suggesting a 108% upside from the current price.

Raymond James analyst Ric Prentiss has revised the price target for Iridium Communications (IRDM) from $47 to $39, a 17% decrease, while maintaining a "Strong Buy" rating. This adjustment comes following an unexpected reduction in the Service Revenue guidance highlighted in the company's second quarter results [1].

Despite the reduction in the price target, the potential for capital returns estimated at $3 billion from 2023 to 2030 remains appealing, although competitive challenges are expected to persist for the foreseeable future [1]. The average analyst target price is $37.63, with an average upside of 51% from the current price [3]. The average brokerage recommendation is 1.8, indicating an "Outperform" status [3].

The estimated GF Value for IRDM in one year is $51.94, suggesting a 108% upside from the current price [3]. This estimate is calculated based on historical multiples the stock has traded at previously, as well as past business growth and future estimates of the business' performance [3].

Iridium Communications reported a 6% increase in operational EBITDA for the second quarter, reaching $121.3 million, driven by revenue from engineering and support and recurring services [3]. The company continues to see strong interest in its IoT services, with commercial IoT revenue up 8% from the previous year [3]. However, the company experienced a decline in commercial broadband revenue by 6% year-over-year, attributed to a shift in customers from primary service to companion backup VSAT plans at a lower ARPU [3].

Iridium Communications is investing in new revenue streams such as Iridium Certus IoT products, Iridium NTN Direct, and satellite time and location services, which are expected to drive future growth [3]. The company has added nearly 50 new business relationships since the start of 2025, expanding its global ecosystem of business partners [3]. Iridium Communications is well-positioned for growth with the US government, with new contracts and a strong relationship with the Department of Defense, contributing to expanding engineering and support revenue [3].

References:
[1] https://www.tipranks.com/news/the-fly/iridium-price-target-lowered-to-39-from-47-at-raymond-james-thefly
[2] https://finance.yahoo.com/news/iridium-communications-nasdaq-irdm-announced-130141298.html
[3] https://www.gurufocus.com/news/3005673/iridium-irdm-sees-price-target-cut-amid-unusual-guidance-adjustment-irdm-stock-news