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Investing.com - Raymond James downgraded Iridium Communications (NASDAQ:IRDM) from Strong Buy to Outperform and reduced its price target to $26.00 from $39.00 on Thursday. According to InvestingPro data, the stock is currently trading at $17.96, significantly below its Fair Value, with strong fundamentals including a 17% free cash flow yield and a P/E ratio of 18.2x.
The downgrade follows SpaceX Starlink’s announcement on Monday that it is purchasing 50 MHz of AWS-4 (S-Band) and H-Block spectrum in the U.S. from SATS, along with various global S-Band MSS rights, to pursue the Direct-to-Device market.
Iridium shares have fallen approximately 29% this week, continuing a downward trend that saw the stock drop 22% on its second-quarter 2025 earnings release day.
The satellite communications company has faced significant pressure due to competitive concerns from SpaceX Starlink, according to Raymond James.
The firm’s analysts plan to attend World Space Business Week in Paris on Monday, where they expect to gather more details on how these developments affect Iridium and other players in the satellite communications sector.
In other recent news, Iridium Communications reported its second-quarter earnings, which fell short of analyst expectations. The company posted earnings per share of $0.20, missing the consensus estimate of $0.24. However, revenue for the quarter was $216.9 million, slightly exceeding the projected $214.01 million and representing an 8% increase from the previous year. Despite the revenue beat, the earnings shortfall has drawn attention. Additionally, BWS Financial downgraded Iridium Communications from Neutral to Sell, citing competitive pressures from Starlink as a major concern. This downgrade followed Starlink’s acquisition of EchoStar’s spectrum licenses for approximately $17 billion, which BWS Financial described as an "existential threat" to Iridium’s business model. These developments have raised questions about the company’s future performance in the competitive satellite communications market.
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