Gilat Satellite Networks (NASDAQ: GILT) and Sierra Wireless (NASDAQ:SWIR) are both small-cap technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, valuation, earnings, analyst recommendations and dividends.

Earnings and Valuation

This table compares Gilat Satellite Networks and Sierra Wireless’ gross 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 1.62 -$5.34 million $0.15 55.07
Sierra Wireless $615.61 million 1.16 $15.38 million $0.71 28.10

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

Insider and Institutional Ownership

7.9% of Gilat Satellite Networks shares are held by institutional investors. Comparatively, 21.0% of Sierra Wireless shares are held by institutional investors. 1.1% of Gilat Satellite Networks shares are held by insiders. Comparatively, 2.0% of Sierra Wireless shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gilat Satellite Networks 0 0 0 0 N/A
Sierra Wireless 0 9 3 0 2.25

Sierra Wireless has a consensus price target of $26.30, indicating a potential upside of 31.83%. Given Sierra Wireless’ higher possible upside, analysts plainly believe Sierra Wireless is more favorable than Gilat Satellite Networks.

Volatility and Risk

Gilat Satellite Networks has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500. Comparatively, Sierra Wireless has a beta of 3.17, suggesting that its stock price is 217% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Gilat Satellite Networks 2.93% 3.85% 2.14%
Sierra Wireless 3.48% 9.32% 6.03%

Summary

Sierra Wireless beats Gilat Satellite Networks on 11 of the 13 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 Sierra Wireless

Sierra Wireless, Inc. is engaged in building the Internet of Things (IoT) with wireless solutions for organizations. The Company’s OEM Solution segment offers cellular embedded wireless modules for IoT connectivity, including an embedded application framework to support customer applications. The Company’s Enterprise Solution segment offers intelligent routers and gateways, including management tools and applications that enable cellular connectivity. The Company’s Cloud and Connectivity Services segment offers a cloud based platform for deploying and managing IoT applications, Smart SIM supported by mobile core networks, and managed wireless broadband services to enable customer IoT deployments. The Company offers a portfolio of second generation, third generation, and fourth generation cellular embedded wireless modules and gateways, integrated with its secure cloud and connectivity services. The Company offers its products to original equipment manufacturers (OEMs) and enterprises.

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