Infinera Corp. (NASDAQ: INFN) and Gilat Satellite Networks (NASDAQ:GILT) are both small-cap technology companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, dividends, profitabiliy, earnings, analyst recommendations, risk and valuation.

Profitability

This table compares Infinera Corp. and Gilat Satellite Networks’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Infinera Corp. -23.05% -21.47% -13.64%
Gilat Satellite Networks -0.72% 3.44% 1.93%

Earnings and Valuation

This table compares Infinera Corp. and Gilat Satellite Networks’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Infinera Corp. $800.84 million 2.07 -$5.60 million ($0.53) -21.32
Gilat Satellite Networks $290.82 million 1.02 $21.11 million ($0.04) -136.00

Gilat Satellite Networks has higher revenue, but lower earnings than Infinera Corp.. Gilat Satellite Networks is trading at a lower price-to-earnings ratio than Infinera Corp., indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current recommendations and price targets for Infinera Corp. and Gilat Satellite Networks, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Infinera Corp. 1 6 8 1 2.56
Gilat Satellite Networks 0 0 0 0 N/A

Infinera Corp. presently has a consensus target price of $11.08, suggesting a potential downside of 1.92%. Given Infinera Corp.’s higher probable upside, research analysts clearly believe Infinera Corp. is more favorable than Gilat Satellite Networks.

Risk & Volatility

Infinera Corp. has a beta of 1.45, indicating that its share price is 45% more volatile than the S&P 500. Comparatively, Gilat Satellite Networks has a beta of 0.88, indicating that its share price is 12% less volatile than the S&P 500.

Insider & Institutional Ownership

81.2% of Infinera Corp. shares are held by institutional investors. Comparatively, 7.9% of Gilat Satellite Networks shares are held by institutional investors. 2.9% of Infinera Corp. shares are held by company insiders. Comparatively, 1.1% of Gilat Satellite Networks shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

Infinera Corp. beats Gilat Satellite Networks on 8 of the 13 factors compared between the two stocks.

About Infinera Corp.

Infinera Corporation provides optical transport networking equipment, software and services to telecommunications service providers, Internet content providers (ICPs), cable providers, wholesale and enterprise carriers, research and education institutions, enterprise customers and government entities across the globe. The Company’s portfolio consists of the Infinera DTN-X Family, the Infinera DTN platform, the Infinera Cloud Xpress Family, the Infinera XTM Series, the Infinera XTG Series and the Infinera FlexILS platform, addressing long-haul, subsea and metro networks end-to-end. Its technology includes Infinera Intelligent Transport Network Architecture, Infinera Photonic Integrated Circuits, Infinera FlexCoherent Processor, Super-Channels, Sliceable Photonics, Disaggregation, Integrated Digital Switching, Infinera Instant Bandwidth, Infinera Packet-Optical Transport, Multi-layer Switching and Optimization, and Management, Control and Security.

About Gilat Satellite Networks

Gilat Satellite Networks Ltd. is a provider of satellite-based broadband communications. The Company operates through three segments: Commercial, Mobility and Services divisions. The Company designs and manufactures satellite ground segment and networking communications equipment, which it sells to its customers either as network components (modems, Block Up converters (BUCs), antennas) or as complete network solutions (which include hubs and related terminals and services) or turnkey projects. The equipment that the Company develops includes commercial Very Small Aperture Terminals (VSAT) systems, defense and homeland security satellite communications systems, solid-state power amplifiers (SSPAs), BUCs, low-profile antennas, on-the-Move/on-the-Pause terminals and modems. The Company’s equipment is used by satellite operators, service providers, telecommunications operators, system integrators, government and defense organizations, large corporations and enterprises.

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