Iridium smartphone contract signed, $20M revenue estimate could be conservative
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Iridium (NASDAQ:IRDM) disclosed on Friday that it had signed a deal with an undisclosed partner to provide satellite service for smartphones and investment firm William Blair believes its estimate of $20M in annual recurring revenue could prove conservative.
Analyst Louie DiPalma, who has an outperform rating on Iridium (IRDM), believes shares could move towards a range of $56 to $69 over the next 12 months, based in part on this deal, as well as its free cash flow projections. 
"All signs continue to point to the highly anticipated deal being a major partnership with Samsung (Guardian of the Galaxy [S23]?) that may be formally unveiled in the first week of February," DiPalma wrote in a note to clients. "We do not believe it is too late for investors to buy Iridium shares, despite the strong run-up in 2022."
Iridium (IRDM) shares were fractionally higher in premarket trading on Tuesday to $51.45.
DiPalma added that Iridium (IRDM) likely looked at GlobalStar's (GSAT) deal with Apple (AAPL) to provide emergency satellite service for its iPhone 14 product line as leverage in its deal, widely believed to be with Samsung (OTCPK:SSNLF).
The analyst added that as part of the Iridium (IRDM) deal, it will be paid development feeds, royalties and network usage fees, depending on successful development of the technology.
"We view the decision by Iridiumâs board of directors to initiate a dividend in early December as a sign that the smartphone technology works and that the contract is lucrative," DiPalma added. 
He also noted that with this deal, it's possible that Iridium (IRDM) connectivity becomes a "mainstay" in high-end Samsung (OTCPK:SSNLF) smartphones over the next decade, given that it ships more than 250M phones every year. DiPalma also noted that the deal could transform Iridium (IRDM) from a niche provider to a mass market communications provider.
Last month, Iridium (IRDM) declared its 13-cent-per share quarterly dividend, which is payable on March 30 to shareholders of record as of March 15.