Advanced Television

Analyst: “Gilat to see strong sales rebound”

June 10, 2021

Quilty Analytics has conducted its first examination of prospects for Israel-based Gilat Satellite Networks. The report is overall positive and says Gilat’s growth is returning and recovering from the Covid-related downturn.

Gilat is today one the world’s largest suppliers of ground equipment for the cellular backhaul, in-flight connectivity (IFC), and broadband markets. Over the past three-plus decades, the company has sold more than 1.5 million VSATs and continually supports more than 900 satellite networks, says Quilty.

Gilat, continues Quilty, is broadly recognised as one of the leaders in VSAT technology and (along with Hughes) one of the few vendors capable of supporting extremely large (i.e. hundreds to thousands of sites) TDMA networks.

However, it has suffered with the numerous impacts of the pandemic; “Gilat was acutely impacted by the Covid-19 pandemic (revenues down 37 per cent), especially in the aviation-heavy Mobility segment (down 48 per cent). These revenues were primarily delayed, not lost, however, suggesting Gilat should experience a strong sales rebound extending through 2022,” suggests Quilty.

Additionally, Gilat is “winning” with geostationary and non-geostationary satellite activity.

“In addition to its traditional strength in GEO-based high throughput satellites (HTS), Gilat has inked contracts with two NGSO operators (SES and a ‘LEO’) for gateway ground equipment. Management believes the broader NGSO opportunity scales to hundreds of millions of dollars,” states the Quilty report.

Meanwhile, “Shell shocked airlines are once again investing in IFC (in-flight connectivity), with a large step-up expected in 2022. Gilat’s anchor customer, Intelsat, is nearing an exit from bankruptcy with plans to bolster its fleet with Gilat’s industry-leading IFC solution,” says Quilty.

“We are projecting Gilat to return to profitability in 2021, but 2022 should be a breakout year for Gilat as headwinds subside, with our model projecting revenues to grow ~30 per cent with EBITDA up nearly 5x,” concludes Quilty.

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