Gilat Satellite Networks Ltd. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next
There's been a notable change in appetite for Gilat Satellite Networks Ltd. (NASDAQ:GILT) shares in the week since its third-quarter report, with the stock down 14% to US$5.73. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at US$116m, statutory earnings beat expectations by a notable 38%, coming in at US$0.11 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the consensus forecast from Gilat Satellite Networks' four analysts is for revenues of US$535.1m in 2027. This reflects a notable 10% improvement in revenue compared to the last 12 months. Per-share earnings are expected to expand 16% to US$0.47. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$566.8m and earnings per share (EPS) of US$0.55 in 2027. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a substantial drop in earnings per share numbers.
See our latest analysis for Gilat Satellite Networks
The consensus price target fell 23% to US$14.70, with the weaker earnings outlook clearly leading valuation estimates. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Gilat Satellite Networks, with the most bullish analyst valuing it at US$18.40 and the most bearish at US$11.00 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Gilat Satellite Networks' revenue growth is expected to slow, with the forecast 7.9% annualised growth rate until the end of 2027 being well below the historical 18% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 15% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Gilat Satellite Networks.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Gilat Satellite Networks analysts - going out to 2028, and you can see them free on our platform here.
We don't want to rain on the parade too much, but we did also find 1 warning sign for Gilat Satellite Networks that you need to be mindful of.
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