NEW YORK ( TheStreet) -- Iridium Communications (Nasdaq: IRDM) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook. Highlights from the ratings report include:
- IRIDIUM COMMUNICATIONS INC has improved earnings per share by 45.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, IRIDIUM COMMUNICATIONS INC increased its bottom line by earning $0.53 versus $0.30 in the prior year. This year, the market expects an improvement in earnings ($0.72 versus $0.53).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Diversified Telecommunication Services industry. The net income increased by 49.6% when compared to the same quarter one year prior, rising from $8.30 million to $12.42 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 4.0%. Since the same quarter one year prior, revenues slightly increased by 2.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.62, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.07, which illustrates the ability to avoid short-term cash problems.
- Net operating cash flow has increased to $36.39 million or 13.06% when compared to the same quarter last year. In addition, IRIDIUM COMMUNICATIONS INC has also vastly surpassed the industry average cash flow growth rate of -39.63%.
-- Written by a member of TheStreet Ratings Staff