Critical Review: Gilat Satellite Networks (GILT) & Polycom (PLCM)

Gilat Satellite Networks (NASDAQ: GILT) and Polycom (NASDAQ:PLCM) are both small-cap communications & networking – nec companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, dividends, profitability, earnings, valuation, institutional ownership and analyst recommendations.

Institutional & Insider Ownership

7.9% of Gilat Satellite Networks shares are owned by institutional investors. Comparatively, 92.4% of Polycom shares are owned by institutional investors. 1.1% of Gilat Satellite Networks shares are owned by insiders. Comparatively, 0.7% of Polycom shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Gilat Satellite Networks 2.83% 7.58% 4.20%
Polycom -3.47% -3.73% -2.23%

Analyst Ratings

This is a summary of recent ratings and price targets for Gilat Satellite Networks and Polycom, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gilat Satellite Networks 0 0 0 0 N/A
Polycom 0 0 0 0 N/A

Risk and Volatility

Gilat Satellite Networks has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500. Comparatively, Polycom has a beta of 1.41, suggesting that its stock price is 41% more volatile than the S&P 500.

Earnings and Valuation

This table compares Gilat Satellite Networks and Polycom’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Gilat Satellite Networks $279.55 million 1.49 -$5.34 million $0.15 50.60
Polycom N/A N/A N/A $0.16 77.94

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

Summary

Gilat Satellite Networks beats Polycom on 5 of the 9 factors compared between the two stocks.

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.

About Polycom

Polycom, Inc. (Polycom) offers solutions for voice, video and content sharing and a line of support and service solutions. The Company operates in Americas; Europe, Middle East and Africa (EMEA), and Asia Pacific (APAC) geographic segments. The Company’s video, voice and content-management and content-sharing solutions include applications for mobile devices, browser-based video collaboration, cloud-delivered services, conference room systems and home/work office solutions and immersive telepresence. It offers various products and solutions, which include UC Group Systems, UC Platform and UC Personal Devices. UC Group Systems includes group video, group voice and immersive telepresence systems. UC Platform includes universal collaboration servers, virtualization management, resource management, recording and streaming, and remote access technologies that constitute the RealPresence Platform. UC Personal Devices includes group video, group voice and immersive telepresence systems.

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