Bull Of The Day: Gilat Satellite Network (GILT)

Gilat Satellite Network (GILT) is a Zacks Rank #2 (Buy) that has an A for Value and an A for Growth.  The company is a leading provider of satellite based broadband communications. This company is a leader in the “very small aperture terminal satellite communications” sector.  There has been a lot of hype around Space X – including Fidelity Investments increasing its stake in that company by 32% and a tender offer for $350B for the entire company.  The success of space X and its fleet of satellites has brought a lot of attention to this space and GILT is positioned to take advantage of that.

Yesterday the stock closed higher by 5.36% on volume of more than 1.8M shares, well above the 226K 20 day average.

Let’s explore more about this company in this Bull of The Day article.

Description

Gilat Satellite Networks Ltd. engages in the provision of broadband satellite communication and networking solutions and services. The company was founded in 1987 and is headquartered in Petah Tikva, Israel.

Earnings History

When I look at a stock, the first thing I do is look to see if the company is beating the number.  This tells me right away where the market’s expectations have been for the company and how management has communicated to the market.  A stock that consistently beats has management communicating expectations to Wall Street that can be achieved.  That is what you want to see.

Gilat Satellite Networks (GILT) has only one quarter with a Zacks Consensus but it was a beat. the company posting EPS of $0.14 vs $0.08 estimate from William Blair.  That works out to be a 75% positive earnings surprise.

Over the last four quarters the company has posted positive earnings of $0.11, $0.11, $0.10 and most recently the $0.14 quarter which we had an estimate for.

Earnings Estimates Revisions

Earnings estimate revisions is what the Zacks Rank is all about. 

Estimates are moving higher for GILT.

Following the recent beat, the estimates for this quarter increased dramatically.

The consensus has moved from $0.04 to $0.14 over the last 30 days.

That move and the beat has pushed the full year 2024 up from $0.32 to $0.48.

Next year increased from $0.44 to $0.47.

Growth

This is the section to pay attention to in this particular write up.

This year the company is looking from $311M in sales which is good for 16.8% growth.

Next year analysts are expecting $448M in sales which represents growth of 44.2%.

That is a significant acceleration in growth, from 16.8% to 44.2%

Valuation

I see a great valuation given the expected growth.  The forward multiple is 12x and that could easily double over the next year.  The price to book of 1.13x is very low for this stock.  Price to sales is right at 1.09x.

Margins have been increasing, going from 7.6% to 7.7% and most recently at 8.7%.

If we see margin hold steady (even as they have been expanding) and add in the additional revenue growth, we could see earnings grow by 40% from the current level, right now the estimate is calling for EPS contraction by 2%, so there is likely going to be a significant swing in expectations for this stock after the first quarter of this year.

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Gilat Satellite Networks Ltd. (GILT) : Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.