In this article, we will take a look at the Jim Cramer recommends selling these 5 stocks. To see more such companies, go directly to Jim Cramer Recommends Selling These 10 Stocks.
5. Iridium Communications Inc.(NASDAQ:IRDM)
Number of Hedge Fund Holders: 34
Last month, Jim Cramer said in his program on CNBC that previously Iridium Communications Inc. (NASDAQ:IRDM) was making money but the stock is now turning out to be a money loser. Cramer has repeatedly said in his program that he is not recommending stocks that are not making money. He repeated the same mantra about Iridium Communications Inc. (NASDAQ:IRDM). Iridium Communications Inc. (NASDAQ:IRDM) stock recently fell after Qualcomm and Iridium ended their satellite feature deal. Iridium Communications Inc. (NASDAQ:IRDM) also posted weak Q3 results in October, missing estimates on both revenue and earnings.
GAAP EPS in the quarter came in at -$0.01, missing estimates by $0.04. Revenue in the quarter jumped 7.4% year over year to $197.6 million, missing estimates by $2.64 million. Operational EBITDA for the third quarter came in at $121.3 million, as compared to $107.8 million for the prior-year period.
Iridium Communications Inc. (NASDAQ:IRDM) talked about its future expectations in Q3 earnings call and said:
“While down from 2022, we expect 2023 equipment sales to remain above normalized historical levels and now expect this year to be the second highest on record. Going forward, we expect equipment sales to moderate to be more in line with historical averages. This is consistent with our comments at our recent Investor Day. Engineering and support revenue was $25.2 million in the third quarter as compared to $17.1 million in the prior year period. The increase reflects ongoing work for the U.S. government related to the Space Development Agency contract that we won last year. We continue to expect engineering revenue will be up significantly this year, but will fluctuate from quarter to quarter based upon execution and milestone achievements. Based upon our results through the third quarter and trends we’re seeing into October, we’re updating our full year guidance for service revenue growth to approximately 10% in 2023 and operational EBIDTA to between $460 million and $465 million.”
Read the full earnings call transcript here.
Here is what Baron Focused Growth Fund has to say about Iridium Communications Inc. (NASDAQ:IRDM) in its Q1 2023 investor letter:
“Iridium, a leading mobile voice and data communications services vendor offering global coverage via satellite, increased 20.8% and added 99 bps to performance in the quarter. The stock outperformed as the company’s revenue growth accelerated, leading to strong profitability and cash flow, which the company used to buy back its stock. The company continues to benefit from its $3 billion investment in its satellite constellation, which is a technologically and capital-intensive effort and a strong barrier to entry. Iridium continues to generate consistent and growing revenue and cash flow, which should lead to a return of capital to shareholders for at least the next 10 years. That is since its satellites last longer than its competitors’ satellites, and they offer stronger broadband given their low-Earth orbit positioning.”
