Report by New Street Research
Very exciting launch as New Street Research starts covering the Space Economy focused on satellites, components, connectivity services and datacentres. Initial coverage is SpaceX, Rocket Lab, Planet Labs, Viasat, Telesat, Iridium, SES, Eutelsat, EchoStar, AST SpaceMobile and Space 42. The team is led by David Barden, Pierre Ferragu and James Ratzer.
Report by BWS Financial
The competitive landscape is intensifying and the existential risk for IRDM is getting bigger, according to Hamed Khorsand. The direct-to-device market is attracting well-capitalised entrants, with Amazon’s acquisition of Globalstar and Starlink’s expansion significantly increasing capacity and bandwidth relative to IRDM’s legacy network. At the same time, a proposed FCC rule could erode the exclusivity of IRDM’s spectrum, undermining a key pillar of its valuation. Customer behaviour is also shifting, with evidence of dual-sourcing and pricing pressure. While positive FCF has supported the equity story, Hamed expects rising investment needs to weigh on future generation. The recent advance in IRDM's stock makes it a good place to short/sell shares.
Multiple satellite operators to be affected by the $7.3bn blockbuster deal - including Eutelsat, EchoStar, Intelsat, Iridium, Telesat, and SES. Quilty Analytics expects the merger to be transformative for Viasat, and one that will rekindle industry interest in satellite operator consolidation. However, complicated network integration, heavy regulatory scrutiny, and potential dissonance between corporate cultures will make for a lengthy subsumption of Inmarsat.
Report by BWS Financial
Space for Re-entry - Hamed Khorsand turns bullish once again having previously made a 400%+ return on the stock (May 2018-Jan 2021). IRDM continues to grow its IOT subscribers at an accelerated pace and with broader adoption of using satellite communications (only a matter of time before satellite communication capabilities are embedded into a smartphone) it puts the company in the middle of a brand-new growth cycle. This growth will allow IRDM to delever its balance sheet aggressively, contributing to a higher stock price. TP $60 (50% upside).