Simply Wall St advises to be cautious with investing in Gilat Satellite Networks

Long-term shareholders of Gilat Satellite Networks, a provider of satellite-based broadband communications, have had some bad luck: the company’s stock prices have fallen in recent years and continue to decline, write analysts at Simply Wall St. Although even good stocks depreciate at times, they believe that it is necessary to wait for an improvement in financial performance before showing interest in the company’s shares.

Details

Before taking an interest in Gilat’s shares, it’s important to see improvements in the company’s fundamental business metrics, warn analysts at Simply Wall St. On Saturday, June 22, they published a report on the company’s performance. Gilat’s long-term shareholders have had «an unfortunate run,» the report states. Gilat’s stock prices have dropped by 44% over the past five years and nearly 15% over the past three months.

And the investors continue to suffer losses, writes Simply Wall St. Over the past five days, the stock has fallen again, this time by nearly 11%. The analysts remind us in the report that earnings per share are also declining. They speculate that the drop in earnings per share has likely disappointed the market, causing investors to be hesitant to buy shares.

According to MarketWatch, the company is monitored by one analyst from Needham, who still rates Gilat’s stock as a Buy. The price target is $8.5, indicating a potential upside of 81% from the closing price on June 24. 

About Gilat

Gilat is a provider of satellite-based broadband communications. Its portfolio includes solutions for orbital constellations with Very High Throughput Satellites (VHTS) as well as Software-Defined Satellites (SDS). Among its clients are military and defense enterprises, aerospace companies, and governments.

At the end of 2023, Gilat reported an 11% increase in revenue to $266.1 million and a net profit of $0.41 per share according to GAAP, compared to a loss of $0.10 per share the previous year. This year, the company expects its revenue to grow by approximately 18%.

Gilat has recently announced the acquisition of Stellar Blu Solutions, a US-based provider of avionics solutions, particularly satellite communications terminals. With this acquisition, the company aims to become a market leader in in-flight connectivity (IFC) technologies and solutions for commercial and business aviation.