Shares of mobile satellite services provider Globalstar (NYSEMKT:GSAT) soared more than 42% through 3:30 p.m. EDT Monday, the first trading day after company CEO David Kagan appeared online at the 24th Annual Burkenroad Reports Investment Conference to provide a financial update on the company’s historical progress and future plans.
Kagan’s presentation stretches 22 pages in length and was mostly historical in nature, so it’s hard to be 100% certain what, precisely, it is in that presentation that investors are responding to today. That being said, a few things jump out.
According to Kagan, Globalstar’s overall revenue growth over the last five years has averaged just 7% per year, but the company’s fastest growing division, which includes providing Internet-of-Things (IoT) services to commercial clients, grew twice as fast — 14% annualized.
Globalstar predicts that the worldwide satellite IoT market that is worth $1.5 billion today will grow to $2.5 billion by 2027, and Globalstar’s satellites are capable of reaching greater than 90% of that market opportunity.
What does this mean to investors? Globalstar seems to be saying that 90% of the growth in global IoT revenue is within its grasp, meaning there’s the potential, at least, for this portion of Globalstar’s business to grow another 50% over the next six years.
On top of this, the company sees a $23 billion addressable market in private LTE cellular services (through 2023) that it can exploit. While I can’t be certain that these are the numbers investors are responding to in today’s trading, with all of Globalstar valued at just $2.1 billion currently, the potential for growth into a couple of multi-billion-dollar markets could be what’s moving the needle on Globalstar stock today.
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