A lot has changed since I called Iridium Communications (NASDAQ: IRDM) my top space economy stock a year ago. But the satellite network operator continues to deliver the goods.

Share prices are up well over 400% since I bought them a few years ago -- including a 60% jump in 2020 -- and the run may not be over as the company continues to add new subscribers to its globe-spanning voice and broadband service. New competition could be on the way (think SpaceX's Starlink), but there's still a lot to like about Iridium's business.

Image source: Getty Images.

A solid end to an uncertain year

Iridium reported 5% year-over-year revenue growth in the final quarter of 2020, a solid showing given that many of its customers are airline, aerospace, and naval organizations that were highly disrupted by the pandemic last year. Commercial use has been the standout growth driver, as companies managing Internet of Things (IoT) networks have looked to Iridium's services -- which cover 100% of the globe -- for help. Revenue from IoT data per user did fall 15% from a year ago, but total billable subscriber additions more than offset that decline. Both commercial and government subscriber counts increased 14% from the end of 2019 to 1.32 million and 1.48 million, respectively.

Added to the results from the rest of the year, Iridium ended up having a pretty good 2020 considering the state of world affairs.

Data source: Iridium Communications.

The company looks poised to keep its slow-and-steady run going in 2021. Net billable subscriber additions accelerated in Q4 as the effects of the pandemic eased. Management was nevertheless cautious on its outlook, calling for just a 3% year-over-year increase in service revenue and a 4% increase in operational EBITDA (earnings before interest, tax, depreciation, and amortization) at the midpoint of guidance. But it did feel optimistic enough that a $300 million share repurchase program was announced, making good on its promise to start returning excess cash to shareholders.

Iridium is well-positioned for commercial and government use

Iridium is a lesson in why investing in a company that's going from cash burn to free-cash-flow positive is so powerful. Building a satellite network is expensive -- the company tapped SpaceX's payload services to help it launch its new constellation -- but Iridium had plenty of customers in place and ready to go once its next-gen service was up and running. Now two years since the completion of its network, Iridium continues to add commercial and government users -- and free cash flow should continue to rise steadily (initial outlook is for $232 million in 2021). And a revival of the space economy bodes well for the company long-term.

But new challenges might be right around the corner. SpaceX's Starlink is targeting consumer internet use, specifically in hard-to-reach rural areas in North America and the U.K. Iridium has its roots in commercial and government customers, including big multi-year contracts with the U.S. Department of Defense, the maritime industry, and the global air traffic control network. But Starlink's progress is worth keeping an eye on, as its coverage is growing fast and could eventually represent a serious disruptive force to satellite operators -- especially as parent SpaceX has the power to launch said satellites (Iridium has to pay someone else to get its hardware into orbit).

Management of debt will of course also be a top concern going forward. Iridium refinanced its liabilities and went a long way toward lowering its interest expenses over the last year. However, debt totaled $1.73 billion at the end of the year, offset by $237 million in cash and equivalents. For now, Iridium is generating ample income to service its debt and turn a tidy profit.

I think Iridium's best days as a high-growth space stock are behind it. After the release of its fourth-quarter earnings report, shares trade for a premium 13 times trailing 12-month sales to enterprise value (market capitalization plus debt), and 37 times trailing 12-month free cash flow to enterprise value. Nevertheless, this still looks like a long-term winner to me in a space economy where steep losses are still the norm -- Iridium's lead in generating positive cash flow is enviable in this nascent industry.

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Nicholas Rossolillo owns shares of Iridium Communications. His clients may own shares of the companies mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.