GILAT SATELLITE NETWORKS LTD. (GILT): what the price requires

Generated: 2026-07-19 · Source: https://boothcheck.com/report/GILT

Headline

Field	Value
Ticker	GILT
Company	GILAT SATELLITE NETWORKS LTD.
Current price	$11.17/sh
Composition	Products 73% / Services 27%

What The Price Requires (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

Field	Value
Inversion basis	whole-company
Operating margin needed	2.2%
Operating margin today	5.2%
Margin compression implied	-3.0pp
Must persist for	6.8y
Multiple paid	31x operating income

The operating-margin requirement is derived from the framework's value band at year 9, a separately labeled basis from the headline growth/duration solve.

Solve inputs: computed at a 9.5% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~1.8 years.

How unusual the bet is: elevated

Reference	Value
vs own history	-0.33σ
cohort percentile (of 178 peers)	55
sustained it ~6.8 years at this level	24%
implied end-window share	0%

Valuation X-Ray

The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Family	Median price/FV	Models	Reads
Asset	3.01x	5	expensive
Earnings	2.59x	5	expensive
Relative	0.75x	5	justifies
Growth	0.91x	3	justifies

Families that justify the price: Relative, Growth Families that call it expensive: Asset, Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.2%); the inversion above states its own rate.

Per-Model Detail (n=18)

Model	Family	FV	Price/FV	Applicable	Methodology
DCF Perpetual Growth	Growth	$8.45	1.32x	yes	FCF base $0.0B, growth 21% (input: historical growth), terminal g 4.0%, WACC 9.2%, 7yr projection
DCF Exit Multiple	Growth	$12.31	0.91x	yes	Exit EV/EBITDA: 8.9x / 10.9x / 12.9x (bear / base = today's held flat / bull), 7yr
Relative Valuation	Relative	$14.87	0.75x	yes	P/E 28x (static sector reference · 2026-04), scenarios: 22.7x / 28.0x / 33.3x (bear / base = reference held flat / bull), EV/EBITDA 20x
Simple DDM	Growth	—	—	no	—
Two-Stage DDM	Growth	—	—	no	—
Simple Excess Return	Asset	$3.71	3.01x	yes	BV/sh $8.28, ROE (TTM) 4.1%, ke 9.3%
Two-Stage Excess Return	Asset	$2.39	4.67x	yes	5yr excess ROE then converge to ke=9.3%
Discounted Future Market Cap	Growth	$13.00	0.86x	yes	Rev $0.5B, growth 21% (input: historical growth; tapered), Terminal P/S: 1.2x / 1.5x / 1.8x (bear / base = today's held flat / bull, cap 12x)
Peter Lynch Fair Value	Relative	$11.90	0.94x	yes	EPS $0.34, growth 35% (input: historical EPS growth), PEG=0.93 (Undervalued)
Margin Trajectory	Growth	—	—	no	—
Earnings Power Value	Earnings	$5.26	2.12x	yes	Normalized EBIT (5y avg op income, one-time charges added back) $0.02B × (1−21%) / WACC 9.2% → EPV (no growth)
Residual Income	Asset	$1.97	5.67x	yes	BV $8.28 + 5yr PV of (ROE (TTM) 4.1% − Kₑ 9.3%) × BV; BV grows 2.7%/yr
Graham Number	Asset	$7.96	1.40x	yes	√(22.5 × EPS $0.34 × BVPS $8.28) — Graham's conservative floor
EV/EBITDA Relative	Relative	$18.26	0.61x	yes	EBITDA $0.05B × sector EV/EBITDA 20.0x
FCF Yield	Earnings	$4.31	2.59x	yes	FCF $9.2M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF Yield	Earnings	$2.80	3.99x	yes	SBC-adj FCF $0.00B (FCF $0.01B − SBC $0.01B) capitalized at Kₑ
Ben Graham Formula	Earnings	$10.97	1.02x	yes	EPS $0.34 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/B	Asset	$4.92	2.27x	yes	BV $8.28 × (ROIC 5.5% / WACC 9.2%)
P/Sales Sector	Relative	$44.86	0.25x	yes	Revenue $0.45B × sector P/S 6.0x
PEG Fair Value	Relative	$12.75	0.88x	yes	EPS $0.34 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x
Earnings Yield	Earnings	$3.68	3.04x	yes	EPS $0.34 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations Multiple	Relative	—	—	no	—
Clinical Phase NPV	Growth	—	—	no	—
Merton	Asset	—	—	no	—
V5 Mechanical	—	—	—	no	—

Solvency

Field	Value
Net cash	$122.7m
Net debt / NOPAT (after-tax)	-6.63x (net cash)
Net debt / operating income (pre-tax)	-5.24x (net cash)
Share count CAGR (dilution)	1.7%
Burning cash	no

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

Gilat's balance sheet is the tell: net cash of roughly $123 million, no meaningful debt, and management confident enough to fund a $157.5 million acquisition entirely from existing cash. That is a company investing from strength, not stretching.

At $13.20 the price implies operating growth held near its self-funding ceiling for about eight years, roughly 37 times operating income. The relative-multiple and growth-DCF lenses support the price; the asset and earnings-power lenses say it is rich.

The business is executing: Q1 2026 revenue rose 20% to $110.5 million, EPS beat sharply, and the pending Comtech satellite-segment deal would push combined revenue past $700 million. The bet is that the satellite-communications growth and the acquisition integration deliver on a demanding implied duration.

Bull Case

The clearest evidence of management's confidence in Gilat is on the balance sheet, and they just put it to work. The company ended Q1 2026 with net cash of roughly $123 million and effectively no debt, and on June 15, 2026 it announced a definitive agreement to acquire the majority of Comtech's Satellite and Space Communications segment for $157.5 million, funded entirely from existing cash resources. A company that can buy a sizable competitor without taking on debt or diluting shareholders is telling you it sees a clear path to deploy capital at attractive returns. The deal would create a business exceeding $700 million in projected annual revenue, a step-change in scale for a satellite-communications specialist that has historically been a smaller player.

The operating results back the capital-allocation confidence. Q1 2026 revenue rose 20% year over year to $110.5 million, the company returned to profitability with net income of $5.23 million, and EPS of $0.18 crushed the $0.04 consensus. The business splits across products at 73% of revenue and services at 27%, and the growth is broad. Gilat reaffirmed full-year 2026 guidance of $500 million to $520 million in revenue with adjusted EBITDA of $61 million to $66 million. A satellite-ground-systems company growing 20% with expanding profitability is participating in the broader build-out of satellite connectivity, from broadband to mobility to defense.

Defense is the higher-margin leg the bull case leans on. Gilat's Stellar Blue unit is integrating more tightly with the commercial business and has begun selling solutions into defense applications, with management expecting more than $10 million of defense business in 2026. Defense and government work tends to carry better margins, longer contracts, and stickier customer relationships than commercial satellite gear, and it diversifies the revenue base away from the most price-competitive commercial segments. Against the communication-equipment peer set of Fabrinet, Ubiquiti, Ciena, ESCO, and Lumentum, Gilat is the satellite-focused name pairing 20% growth, a net cash balance sheet, an accretive cash-funded acquisition, and a defense growth angle. The price implies a long runway; the company is assembling the pieces to fill it.

Bear Case

The bear case starts with competitive disruption, because Gilat sells ground equipment into a satellite market being reshaped by players far larger than it. Low-earth-orbit constellations led by SpaceX's Starlink and others are changing how satellite connectivity is delivered, and the economics of ground systems shift with them. Gilat competes against bigger communication-equipment vendors (Ciena, Lumentum, Fabrinet, and others) with deeper R&D budgets, and against the in-house capabilities of the constellation operators themselves. A small-cap supplier in a market where the dominant customers and competitors have vastly more capital is structurally exposed: it can be designed out, undercut, or bypassed as the architecture of satellite communications evolves. The 20% growth quarter is encouraging, but it does not insulate Gilat from a market whose direction is set by others.

The second problem is that the price assumes a long, demanding runway. At about 37 times operating income, the valuation implies operating growth held near the self-funding ceiling for roughly eight years, and history says only about 20% of comparable fast-growers sustain that pace for that long. The asset-based and earnings-power lenses agree the price is rich: simple excess return lands near $4, residual income near $2, earnings-power value near $5, and FCF yield near $4, all far below the $13.20 (June 27, 2026) quote. The relative-multiple and growth-DCF frames are what justify the price, and those depend on the growth and the multiple holding. The stock actually fell on the strong Q1 print, a sign the market was already pricing in a lot and wanted more.

The third issue is integration and execution risk layered onto a cyclical, project-driven business. The Comtech satellite-segment acquisition is strategically logical, but integrating an acquired business is never free: cultures, product lines, and customer contracts must be merged, and the targeted revenue synergies that justify the $157.5 million price have to materialize. Gilat's revenue is partly tied to large government and infrastructure projects that can be lumpy, delayed, or cancelled, and a 7.1% current operating margin leaves little room for execution stumbles. The net cash balance sheet is a genuine strength and removes solvency risk, but it does not change the core tension: the price embeds eight years of ceiling-rate growth for a small player in a market being disrupted by giants, and the cash-flow methods already consider the valuation full. The bet is that Gilat carves out a durable niche before the disruption reaches it.

Valuation

The inversion frames a demanding bet. At $13.20 the market is paying about 37 times company-wide operating income, which at a 9.3% cost of capital implies operating growth held near the 25% self-funding ceiling for roughly eight years. Each percentage point of assumed growth moves that implied horizon by about 1.9 years. The priced-in assumption reads as elevated: the near-term pace is within what Gilat has recently delivered, but only about 20% of comparable fast-growers have sustained that pace for eight years, so the stretch is in the duration.

The model X-ray shows the split of a small-cap growth name. The relative-multiple and growth-DCF families justify the price (DCF exit multiple lands near $14, relative valuation near $15, discounted future market cap near $15, all at or near the quote). The asset-based and earnings-power families say expensive (two-stage excess return near $2, residual income near $2, earnings-power value near $5, FCF yield near $4). The blended cross-method anchor sits near $10, below the price. The pattern, asset and earnings lenses well under the quote and only the forward-looking methods reaching it, means the valuation rests on growth and multiple persistence rather than on current cash generation.

The balance sheet is the standout strength. Gilat holds net cash of about $123 million against roughly $89 million of trailing operating income, with no meaningful debt, and it is funding the entire $157.5 million Comtech acquisition from existing cash. That removes any solvency concern and gives the company room to invest through the satellite-market transition. The recent results, revenue up 20%, a return to profitability, an EPS beat, and reaffirmed guidance, are real and material to the forward view, and the pending acquisition would roughly double the revenue base toward $700 million. The reasonable conclusion is that Gilat is a financially strong, fast-growing satellite-communications specialist whose price already assumes a long growth runway. The upside is the acquisition and defense expansion delivering; the risk is that the cash-flow methods are right that the present business does not yet support the price.

Catalysts

The Q1 2026 report on May 13 was the most recent earnings catalyst. Revenue rose 20% year over year to $110.5 million, the company returned to profitability with net income of $5.23 million (a 4.7% margin), and EPS of $0.18 beat the $0.04 consensus by a wide margin. Management reaffirmed full-year 2026 guidance of $500 million to $520 million in revenue and adjusted EBITDA of $61 million to $66 million. Notably, the stock fell on the print, suggesting expectations were already high. (Sources: Investing.com Q1 2026 earnings call; StockInvest earnings report; Simply Wall St.)

The transformative catalyst is the Comtech acquisition announced June 15, 2026: a definitive agreement to acquire the majority of Comtech's Satellite and Space Communications segment for $157.5 million, funded entirely from Gilat's roughly $170 million of cash, creating a combined business exceeding $700 million in projected annual revenue. The integration and synergy realization will be the key story through 2026 and 2027. Other signals to watch are the defense ramp through Stellar Blue (management expects more than $10 million of defense business in 2026) and the broader trajectory of satellite-connectivity demand. Because the price assumes a long growth runway, evidence that the acquisition is accretive and defense is scaling would be the clearest upside catalysts. (Sources: Simply Wall St news; Investing.com; TipRanks.)

Peer Cohorts (Per Segment, With Filing Citations)

Commercial (reported)

• VSAT (VIASAT INC)
• FY2025 10-K: …in our backlog only those orders for which we have accepted purchase orders, and not anticipated purchase orders and requests. In our communication services segment, our backlog includes fixed broadband service revenues under our subscriber agreements, but does not include future recurring IFC service revenues under…
• FY2025 10-K: N.A. (as agent) and the other lenders party thereto 8-K 000-21767 10.1 11/26/2013 10.29.1 First Amendment to Credit Agreement and Other Loan Documents dated as of March 12, 2015, by and among ViaSat, Inc., Union Bank, N.A. (as agent) and the other lenders party thereto 8-K 000-21767 10.2 03/13/2015 10.29.2 Second…
• SATS (EchoStar Corporation)
• FY2025 10-K: 8203; ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenue from external customers: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Service revenue ​ $ 11,377,524 ​ $ 3,337,186 ​ $ 1,431,053 ​ $ - ​ $ 16,145,763 ​ $ - ​ $ 16,145,763 Equipment sales and other revenue ​ ​ 175,948 ​ ​…
• FY2025 10-K: ​ ​ Amount ​ ​ ​ % ​ ​ (In thousands) ​ ​ Revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Service revenue ​ $ 3,315,978 ​ $ 3,156,760 ​ $ 159,218 ​ 5.0 Equipment sales and other revenue ​ ​ 479,697 ​ ​ 437,437 ​ ​ 42,260 ​ 9.7 Total revenue ​ ​ 3,795,675 ​ ​ 3,594,197 ​ ​ 201,478 ​ 5.6 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Costs and Expenses: ​ ​ ​…
• IRDM (Iridium Communications Inc.)
• FY2025 10-K: …Services" below for more information. Seasonality Our business is subject to seasonal usage changes for commercial customers, and we expect it to be affected by similar seasonality going forward. March through October are typically the peak months for commercial voice traffic and related 14 subscriber equipment…
• FY2025 10-K: …to our principal products, we also offer a selection of accessories for our devices, including extended-life batteries, holsters, earbud headphones, portable auxiliary antennas, antenna adaptors, USB data cables and charging units. We purchase these products from several third-party suppliers either pursuant to…
• GSAT (GLOBALSTAR, INC.)
• FY2025 10-K: Note 2: Special Purpose Entity, the Updated Services Agreements provide for prepayments from the Customer for approved capital expenditures associated with the Extended MSS Network. As of December 31, 2025, the Company incurred $ 0.7 billion of the $ 1.5 billion projected spend for the Extended MSS Network. The…
• FY2025 10-K: …as our holiday promotions. Services and Equipment Sales of services accounted for approximately 94%, 95% and 91% of our total revenues for 2025, 2024, and 2023, respectively. We also currently sell related data equipment to our Commercial IoT and SPOT customers, which accounted for approximately 6%, 5% and 9% of our…
• ASTS (AST SpaceMobile, Inc.)
• FY2025 10-K: …for Base Capped Call Transactions, dated July 24, 2025 (incorporated by reference to Exhibit 10.1 to the registrant's Current Report on Form 8-K filed with the SEC on July 29, 2025). 10.36 Form of Confirmation for Additional Capped Call Transactions, dated July 25, 2025 (incorporated by reference to Exhibit 10.2 to…
• FY2025 10-K: …by reference to Exhibit 10.21 to the registrant's Current Report on Form 8-K filed with the SEC on April 12, 2021). 10.23 Sublease Agreement, dated November 13, 2018, by and between the Midland Development Corporation and AST & Science, LLC (incorporated by reference to Exhibit 10.22 to the registrant's Current…

Defense (reported)

• KTOS (Kratos Defense & Security Solutions, Inc.)
• FY2025 10-K: …property and past performance qualifications and by offering a wider range of comprehensive low-cost technology leading and proven products and solutions compared to our competitors. In regard to areas of specialization, our product and solution offerings include the manufacturing of specialized defense electronics;…
• FY2025 10-K: …our competitors, both traditional and new. We believe that our reputation, longstanding customer relationships, past-performance qualifications and the designed-in position of our hardware systems, technology and products into our customers' and partners' platforms, programs and systems, provide a unique competitive…
• DRS (Leonardo DRS, Inc.)
• FY2025 10-K: …and power generation and management are central to these priorities. Demand for our technologies is concentrated in areas of sustained priority for the DoW, including counter‑unmanned aircraft systems ("C-UAS"), advanced infrared sensing, network computing, and electric power and propulsion for next generation navy…
• FY2025 10-K: …will independently develop equivalent technology or misappropriate our technology or designs; • disputes will arise with our strategic partners, customers or others concerning the ownership of intellectual property; and • contractual provisions may not be enforceable in certain jurisdictions. Also, despite the steps…
• MRCY (MERCURY SYSTEMS, INC.)
• FY2025 10-K: …product, where the customer evaluates alternative technologies and design approaches. We work with defense prime contractors as well as directly with the DoD. We help drive subsystem development and deployment in both classified and unclassified environments. The principal competitive factors in our market are…
• FY2025 10-K: …revenue or margin. Requirements for more frequent technology refreshes on defense programs may lead to increased costs and lower long-term revenues. • Consolidation among defense industry contractors has resulted in a few large contractors with increased bargaining power relative to us. • Our customers include U.S.…
• ESLT (ELBIT SYSTEMS LTD)
• FY2025 20-F: …for most of our projects, systems and products. Competition is based on product and program performance, price, reputation, reliability, life cycle costs, overall value to the customer, responsiveness to customer requirements and the ability to respond to rapid changes in technology. In addition, our competitive…
• FY2025 20-F: …operational needs of our customers, achieving reduced time to market and increasing affordability. We emphasize improving existing systems and products and developing new ones using emerging or existing technologies, including an increasing use of open source software and generative AI. Our R&D projects relate to…
• CW (CURTISS-WRIGHT CORPORATION)
• FY2025 10-K: …The commercial aerospace business is primarily impacted by OEM production rates of new aircraft, while the defense business is primarily impacted by government funding and spending on new programs, primarily driven by the U.S. Government. Certain industrial businesses within our Aerospace & Industrial segment are…
• FY2025 10-K: …- % 5 % Foreign currency 1 % 2 % Total 5 % 12 % Sales increased $44 million, or 5%, to $977 million, from the comparable prior year period. In the commercial aerospace market, sales increased $34 million primarily due to higher demand for sensors products and surface treatment services on various narrow-body and…

Peru (reported)

• TIGO (MILLICOM INTERNATIONAL CELLULAR SA)
• FY2025 20-F: …which includes Nicaragua, Costa Rica and El Salvador. The Honduras segment presents the results of our Honduras joint venture as if it were fully consolidated, as this reflects the way management reviews and uses internally reported information to make decisions. The following table sets forth our revenue by…
• FY2025 20-F: …facility to October 12, 2027, between Millicom International Cellular, S.A. and one lender, dated October 15, 2025. 4.17 * English summary of the Amended and Restated Loan Agreement for the UYU 7,793,000,000 due 2030, between Telefónica Móviles del Uruguay S.A., Banco Santander S.A., and Millicom International…
• TIMB (TIM S.A.)
• FY2025 20-F: …Schedule of actuarial assumptions Nominal discount rate for the actuarial obligation: PBS South: 10.05% / 7.29%; PBS Nordeste: 10.92% / 7.17%; CA: 11.00% / 7.25%; PBS-A: 11.29% / 7.53%; AES: 10.88% / 7.13%; PAMEC: 11.17% / 7.41%; FIBER: 11.85% / 7.10% Salary growth rate - nominal: PBS Nordeste: 3.50% / 0.00% PBS Sul,…
• FY2025 20-F: ANATEL. The Brazilian mobile market reported an increase in subscriber base of 2.7% year-on-year ("YoY"), maintaining the growth trend seen in the last year. In 2025, the number of postpaid users reached 175.9 million. Since 2021, the prepaid customer base has no longer been the market's largest portion and has…
• TLK (PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA TBK)
• (no filing in the citation store)
• PHI (PLDT Inc.)
• FY2025 20-F: …Vice President August 15, 2023 to March 20, 2024 Patricio S. Pineda III (3) 56 Senior Vice President April 2, 2025 to present Enterprise Business Head April 2, 2025 to present Luis S. Reňon 55 Senior Advisor to the Chairman November 16, 2024 to present Senior Vice President May 4, 2023 to present Internal Audit Head…
• FY2025 20-F: …our First Vice President and Chief Information Security Officer and Cybersecurity Operations Head. Prior to joining PLDT, he held key technical leadership positions in Zuellig Pharma Asia Pacific Ltd. as Head of Network, Infrastructure, and Cybersecurity from April 2022 to August 2024 and Senior Director of Regional…
• TDS (TELEPHONE AND DATA SYSTEMS, INC.)
• FY2025 10-K: :PerformanceSharesMember srt:ParentCompanyMember 2025-01-01 2025-12-31 0001051512 tds:A2025GrantsMember us-gaap:CommonClassBMember us-gaap:PerformanceSharesMember srt:ParentCompanyMember srt:MinimumMember 2025-01-01 2025-12-31 0001051512 us-gaap:CommonClassBMember us-gaap:PerformanceSharesMember…
• FY2025 10-K: …tds:OtherSegmentMember us-gaap:TransferredOverTimeMember 2024-01-01 2024-12-31 0001051512 tds:CommercialRevenueMember us-gaap:TransferredOverTimeMember 2024-01-01 2024-12-31 0001051512 tds:WholesaleRevenueMember tds:TDSTelecomSegmentMember us-gaap:TransferredOverTimeMember 2024-01-01 2024-12-31 0001051512…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.