GILT

We rate GILAT SATELLITE NETWORKS LTD (GILT) as a Buy with a composite score of 66.6/100 at a current price of $15.44. The stock scores above average across the majority of our six quantitative factors and ranks #207 out of 7,333 stocks in our universe, reflecting a favorable risk-reward profile.

The rating is primarily driven by strength in value (94th percentile) and quality (83th percentile), which together account for the majority of the composite score. All factors score above the 40th percentile, indicating no material weakness in the quantitative profile. We assign a Narrow Moat rating (63/100), Medium uncertainty, and Exemplary capital allocation.

Key items to watch: quarterly earnings execution and sector-level competitive dynamics. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

GILAT SATELLITE NETWORKS LTD holds a top-quartile position (#0 of 50) within the Manufacturing sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 66.6/100 places it at rank #207 in our full 7,333-stock universe. At $351M in market capitalization, GILAT SATELLITE NETWORKS LTD is a small-cap player in the Manufacturing space, which limits certain scale advantages but may allow for more agile strategic execution.

The outlook is moderately positive, with revenue expanding at 15% and favorable momentum (80th percentile) reflecting constructive market sentiment. The business shows steady execution, though the growth rate is below the levels typically associated with high-conviction growth stories. Momentum confirmation provides support for the current price level.

The margin cascade tells an important story: gross margins of 37% (-5.4pp vs sector) narrow to operating margins of 9% (+7.8pp vs sector) and net margins of 8.1%, yielding a gross-to-net conversion rate of 22%. This conversion rate is typical for the sector, suggesting a standard cost structure without notable efficiency advantages or disadvantages.

At a current price of $15.44, GILAT SATELLITE NETWORKS LTD appears undervalued relative to its fundamentals. Our value factor score of 94/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. The stock screens as attractively priced on a majority of these measures, suggesting the market may be underappreciating the underlying fundamentals.

The stock currently trades at a P/E of 32.6x (a 47% premium to the sector median of 22.3x), EV/EBITDA of 5.6x (discounted to peers), P/B of 3.5x, P/S of 0.9x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis partially supports given strong quality metrics.

We assign a Medium uncertainty rating to GILAT SATELLITE NETWORKS LTD. The stock presents a balanced risk profile: elevated market sensitivity (beta of 1.38). While not risk-free, the core business fundamentals are adequate to withstand moderate economic stress, and the range of potential outcomes around our fair value estimate is manageable.

Specific risk factors that inform our assessment include: elevated market sensitivity (beta of 1.38). Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 46th percentile and quality factor at the 83th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: conservative leverage (1% D/E) limits balance sheet risk. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.

We rate GILAT SATELLITE NETWORKS LTD's capital allocation as Exemplary. Management demonstrates a strong track record of balancing reinvestment with shareholder returns, evidenced by returns on equity of 32.6%, disciplined leverage (1% D/E). Exemplary allocators typically generate returns on equity above 20% while maintaining debt-to-equity below 50% — GILAT SATELLITE NETWORKS LTD meets this high bar.

The balance sheet remains conservatively managed, providing financial flexibility for opportunistic investments while maintaining a margin of safety for shareholders. We note that the combination of 23.1% return on assets and controlled leverage suggests management is deploying capital at rates well above the cost of capital — the hallmark of exemplary stewardship.

In summary, GILAT SATELLITE NETWORKS LTD receives a Buy rating with a composite score of 66.6/100 (rank #207 of 7,333). Our quantitative framework assigns a Narrow Moat (63/100, trend: stable), Medium uncertainty, and Exemplary capital allocation. The average factor score across quality, value, momentum, stability, and investment is 70/100.

Our analysis supports a constructive view on GILAT SATELLITE NETWORKS LTD. The combination of identifiable competitive advantages, medium uncertainty, and exemplary capital allocation creates a risk-reward profile that favors accumulation at current levels. We recommend investors consider adding this name to portfolios aligned with the stock's risk profile.