Iridium Communications (NASDAQ:IRDM) versus Globalstar (NASDAQ:GSAT) Critical Review

Iridium Communications (NASDAQ:IRDM) and Globalstar (NASDAQ:GSAT) are both mid-cap computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, valuation, risk, dividends and analyst recommendations.

Valuation and Earnings

This table compares Iridium Communications and Globalstar”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Iridium Communications	$830.68 million	3.70	$112.78 million	$1.06	26.82
Globalstar	$250.35 million	11.87	-$63.16 million	($0.73)	-32.16

Iridium Communications has higher revenue and earnings than Globalstar. Globalstar is trading at a lower price-to-earnings ratio than Iridium Communications, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

84.4% of Iridium Communications shares are owned by institutional investors. Comparatively, 18.9% of Globalstar shares are owned by institutional investors. 2.4% of Iridium Communications shares are owned by insiders. Comparatively, 61.0% of Globalstar shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Iridium Communications and Globalstar’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Iridium Communications	14.68%	19.41%	4.60%
Globalstar	-29.65%	-8.96%	-2.51%

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Iridium Communications and Globalstar, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Iridium Communications	0	1	4	0	2.80
Globalstar	0	0	0	0	0.00

Iridium Communications presently has a consensus target price of $34.25, indicating a potential upside of 20.47%. Given Iridium Communications’ stronger consensus rating and higher possible upside, equities analysts plainly believe Iridium Communications is more favorable than Globalstar.

Risk & Volatility

Iridium Communications has a beta of 0.75, meaning that its stock price is 25% less volatile than the S&P 500. Comparatively, Globalstar has a beta of 0.86, meaning that its stock price is 14% less volatile than the S&P 500.

Summary

Iridium Communications beats Globalstar on 11 of the 14 factors compared between the two stocks.

About Iridium Communications

Iridium Communications Inc. provides mobile voice and data communications services and products to businesses, the United States and international governments, non-governmental organizations, and consumers worldwide. The company offers postpaid mobile voice and data satellite communications; prepaid mobile voice satellite communications; push-to-talk; broadband data; and Internet of Things (IoT) services. It also provides hosted payload and other data services, such as satellite time and location services; and inbound connections from the public switched telephone network, short message, subscriber identity module, activation, customer reactivation, and other peripheral services. In addition, the company offers voice and data solutions comprising personnel tracking devices; asset tracking devices for equipment, vehicles, and aircrafts; beyond-line-of-sight aircraft communications applications; maritime communications applications; specialized communications solutions for high-value individuals; mobile communications and data devices for the military and other government agencies, such as secure satellite handsets, as well as netted voice, messaging, and paging services; and maintenance services for the United States government's dedicated gateway. Further, it provides satellite handsets, voice and data modems, broadband data devices, and IoT data devices; various accessories for its devices that include batteries, holsters, earbud headphones, portable auxiliary antennas, antenna adaptors, USB data cables, charging units, and others; and engineering and support services. Iridium Communications Inc. sells its products and services to commercial end users through a wholesale distribution network that include service providers, and value-added resellers and manufacturers. The company was formerly known as Iridium Holdings LLC and changed its name to Iridium Communications Inc. in September 2009. Iridium Communications Inc. is headquartered in McLean, Virginia.

About Globalstar

Globalstar, Inc. provides mobile satellite services worldwide. The company offers duplex two-way voice and data products, including mobile voice and data satellite communications services and equipment for remote business continuity, recreational usage, safety, emergency preparedness and response, and other applications; fixed voice and data satellite communications services and equipment at industrial, commercial, and residential sites, as well as rural villages and ships; and data modem services and equipment. It also provides SPOT consumer retail products, such as SPOT satellite GPS messenger for personal tracking, emergency location, and messaging solutions; and SPOT Trace, an anti-theft and asset tracking device. In addition, the company offers commercial Internet of Things one-way transmission products to track cargo containers and rail cars, as well as to monitor utility meters, and oil and gas assets. Further, it sells wholesale minutes to independent gateway operators (IGOs); and provides engineering services, such as hardware and software designs to develop specific applications; and installation of gateways and antennas. The company distributes its products directly, as well as through independent agents, dealers and resellers, retailers, IGOs, and sales force and e-commerce Website. As of December 31, 2020, it had approximately 745,000 subscribers. The company primarily serves recreation and personal, government, public safety and disaster relief, oil and gas, maritime and fishing, construction, utilities, and transportation, as well as natural resources, mining, and forestry markets. Globalstar, Inc. has a strategic alliance with XCOM Labs to jointly commercialize XCOM’s capacity-multiplying technology with Globalstar’s Band n53 for 5G deployments in the United States and other countries where Globalstar has terrestrial rights. The company was founded in 1993 and is headquartered in Covington, Louisiana.