Critical Comparison: Gilat Satellite Networks (NASDAQ:GILT) and ADVA Optical (OTCMKTS:ADVOF)

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

Insider and Institutional Ownership

35.7% of Gilat Satellite Networks shares are held by institutional investors. 1.1% of Gilat Satellite Networks shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations for Gilat Satellite Networks and ADVA Optical, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gilat Satellite Networks	0	2	1	1	2.75
ADVA Optical	0	0	0	0	0.00

Gilat Satellite Networks presently has a consensus target price of $20.00, indicating a potential upside of 90.48%. Given Gilat Satellite Networks’ stronger consensus rating and higher possible upside, research analysts clearly believe Gilat Satellite Networks is more favorable than ADVA Optical.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Gilat Satellite Networks	6.21%	10.12%	6.79%
ADVA Optical	N/A	N/A	N/A

Risk and Volatility

Gilat Satellite Networks has a beta of 1.06, indicating that its share price is 6% more volatile than the S&P 500. Comparatively, ADVA Optical has a beta of 0.13, indicating that its share price is 87% less volatile than the S&P 500.

Earnings & Valuation

This table compares Gilat Satellite Networks and ADVA Optical”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gilat Satellite Networks	$451.66 million	1.72	$20.72 million	$0.44	23.86
ADVA Optical	$922.72 million	2.12	-$450.87 million	$0.22	109.95

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

Summary

Gilat Satellite Networks beats ADVA Optical on 12 of the 15 factors compared between the two stocks.

About Gilat Satellite Networks

Gilat Satellite Networks Ltd., together with its subsidiaries, provides satellite-based broadband communication solutions in Israel, the United States, Peru, and internationally. It operates in three segments: Satellite Networks, Integrated Solutions, and Network Infrastructure and Services. Its portfolio consists of cloud-based satellite network platform, very small aperture terminals, amplifiers, modems, on-the-move antennas, solid state power amplifiers, block upconverters, transceivers, and defense ground systems and field services. The company also develops, manufactures, and supplies products and solutions for mission-critical defense and broadcast satellite communications systems, advanced on-the-move and on-the-pause satellite communications equipment, systems, and solutions, including airborne, ground-mobile satellite systems and solutions; and provides terrestrial, including fiber optic and wireless network, and satellite network construction and operation services. In addition, it provides turnkey integrated solutions, including managed satellite network services, network planning and optimization, remote network operation, call center support, hub and field operations, and communication networks construction and installation services; connectivity services, internet access, and telephony services to enterprise, government, and residential customers; and builds telecommunication infrastructure using fiber-optic and wireless technologies for broadband connectivity. The company sells its products and solutions to communication service providers, satellite operators, Mobile Network Operators, and system integrators that use satellite communications to serve enterprise, social inclusion solutions, government and residential users, and defense and homeland security organizations, as well as directly to end-users. Gilat Satellite Networks Ltd. was incorporated in 1987 and is headquartered in Petah Tikva, Israel.

About ADVA Optical

Adtran Networks SE engages in the development, manufacture, and sale optical and Ethernet-based networking solutions for telecommunications carriers and enterprises to deliver data, storage, voice, and video services worldwide. It offers open optical transport solutions, such as FSP 3000 open terminals, FSP 3000 open line systems, pluggables and subsystems, and optical access solutions; packet edge and aggregation products, including carrier Ethernet and programmable multilayer edge, metro aggregation, and edge computing products; disaggregated networking, such as packet optical terminals and ensemble activators. The company also provides network virtualization products comprising ensemble connectors, orchestrators, and harmony ecosystems, as well as operates ensemble virtualization director, a management platform for the creation and deployment of virtualized services; network infrastructure assurance products; timing and synchronization products; and automated network management products, such as ensemble optical, sync, fiber, and packet director, and ensemble controllers. In addition, it offers professional services to build, care, and enable the networks. Adtran Networks SE sells its products to telecommunications service providers, private companies, universities, and government agencies directly, as well as through a network of distribution partners. The company was formerly known as ADVA Optical Networking SE and changed its name to Adtran Networks SE in June 2023. The company was founded in 1994 and is headquartered in Munich, Germany. Adtran Networks SE operates as a subsidiary of ADTRAN Holdings, Inc.