Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model. 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 growth in earnings per share, compelling growth in net income, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
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- IRIDIUM COMMUNICATIONS INC has improved earnings per share by 6.3% 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 $0.82 versus $0.55 in the prior year. This year, the market expects an improvement in earnings ($0.91 versus $0.82).
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Diversified Telecommunication Services industry average. The net income increased by 20.3% when compared to the same quarter one year prior, going from $12.42 million to $14.93 million.
- The debt-to-equity ratio is somewhat low, currently at 0.84, 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 this, the company maintains a quick ratio of 2.76, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for IRIDIUM COMMUNICATIONS INC is currently very high, coming in at 71.30%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 16.74% is above that of the industry average.
-- Written by a member of TheStreet Ratings Staff