Gilat Satellite Networks Ltd (NASDAQ: GILT)

Sector: Technology Industry: Communication Equipment CIK: 0000897322
Market Cap 730.06 Mn
P/B 1.87
P/E 30.81
P/S 1.86
ROIC (Qtr) 6.86
Div Yield % 0.00
Rev 1y % (Qtr) 57.74
Total Debt (Qtr) 65.03 Mn
Debt/Equity (Qtr) 0.17

About

GILAT SATELLITE NETWORKS LTD (GILT) is a leading global provider of satellite-based broadband communications, with its headquarters in Israel. Established in 1987, the company has since grown to become a prominent player in the satellite ground equipment industry. GILAT's primary business activities involve designing and manufacturing ground-based satellite communications equipment, offering comprehensive solutions and end-to-end services powered by its cutting-edge technology. GILAT's operations span across various market sectors, including broadband...

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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 43.26M provides robust 0.67x coverage of total debt 65.03M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 154.88M provide 23.71x coverage of short-term debt 6.53M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 449.88M provides 6.92x coverage of total debt 65.03M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 43.26M provides exceptional 13.89x coverage of interest expenses 3.12M, showing strong debt service capability.
  • Robust free cash flow of 32.48M exceeds capital expenditure of 10.78M by 3.01x, indicating strong organic growth funding capability.

Bear case

  • Operating cash flow of 43.26M barely covers its investment activities of (119.22M), with a coverage ratio of -0.36, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (119.22M) provide weak support for R&D spending of 45.53M, which is -2.62x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 154.88M provide limited coverage of acquisition spending of (104.94M), which is -1.48x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of 43.26M provides insufficient coverage of deferred revenue obligations of 81.55M, which is 0.53x, raising concerns about future service delivery capabilities.
  • Operating cash flow of 43.26M provides minimal -12.16x coverage of tax expenses of (3.56M), suggesting potential tax planning inefficiencies or unsustainable tax positions.

Peer comparison

Companies in the Communication Equipment
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 CSCO Cisco Systems, Inc. 306.02 Bn 29.63 5.30 28.09 Bn
2 MSI Motorola Solutions, Inc. 63.92 Bn 30.21 5.65 9.81 Bn
3 HPE Hewlett Packard Enterprise Co 35.43 Bn -600.50 1.03 22.37 Bn
4 UI Ubiquiti Inc. 33.47 Bn 42.27 12.14 0.17 Bn
5 CIEN Ciena Corp 33.16 Bn 268.82 6.95 1.58 Bn
6 LITE Lumentum Holdings Inc. 25.28 Bn 224.75 13.73 3.28 Bn
7 ASTS AST SpaceMobile, Inc. 19.88 Bn -65.43 1,072.82 0.72 Bn
8 ZBRA Zebra Technologies Corp 12.46 Bn 24.33 2.37 2.32 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.08 2.22
EV to Cash from Ops. EV/CFO 16.89 10.78
EV to Debt EV to Debt 11.24 25.00
EV to EBIT EV/EBIT 31.42 32.18
EV to EBITDA EV/EBITDA 17.17 10.60
EV to Free Cash Flow [EV/FCF] EV/FCF 22.49 -3.32
EV to Market Cap EV to Market Cap 1.00 1.17
EV to Revenue EV/Rev 1.86 27.87
Price to Book Value [P/B] P/B 1.87 5.35
Price to Earnings [P/E] P/E 30.81 2.67
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 0.91
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 -25.01
Dividend per Basic Share Div per Share (Qtr) 0.00 0.22
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 4.46
Interest Coverage Int. cover (Qtr) 7.46 -12.93
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -74.21 -73.93
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 39.85 463.06
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.39
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 90.02 204.95
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 32.39 -1.04
EBIT Growth (1y) % EBIT 1y % (Qtr) 30.59 238.24
EBT Growth (1y) % EBT 1y % (Qtr) -1.49 173.82
EPS Growth (1y) % EPS 1y % (Qtr) 44.83 8.68
FCF Growth (1y) % FCF 1y % (Qtr) 69.54 20.80
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 13.35 41.66
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.58 0.76
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.03
Cash Ratio Cash Ratio (Qtr) 0.83 1.20
Current Ratio Curr Ratio (Qtr) 1.72 2.69
Debt to Equity Ratio Debt/Equity (Qtr) 0.17 0.43
Interest Cover Ratio Int Coverage (Qtr) 7.46 -12.93
Times Interest Earned Times Interest Earned (Qtr) 7.46 -12.93
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 10.80 -40.66
EBIT Margin % EBIT Margin % (Qtr) 5.92 -52.32
EBT Margin % EBT Margin % (Qtr) 5.13 -59.46
Gross Margin % Gross Margin % (Qtr) 32.10 39.35
Net Profit Margin % Net Margin % (Qtr) 6.00 -60.72