Analyzing Lumentum Holdings (LITE) & Gilat Satellite Networks (GILT)

Lumentum Holdings (NASDAQ: LITE) and Gilat Satellite Networks (NASDAQ:GILT) are both computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, profitability, valuation, risk, institutional ownership, earnings and analyst recommendations.

Earnings and Valuation

This table compares Lumentum Holdings and Gilat Satellite Networks’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Lumentum Holdings $1.00 billion 3.56 $120.60 million ($1.69) -34.20
Gilat Satellite Networks $289.16 million 1.20 $25.44 million $0.07 90.86

Lumentum Holdings has higher revenue and earnings than Gilat Satellite Networks. Lumentum Holdings 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.

Analyst Recommendations

This is a breakdown of recent ratings for Lumentum Holdings and Gilat Satellite Networks, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Lumentum Holdings 1 3 10 1 2.73
Gilat Satellite Networks 0 0 0 0 N/A

Lumentum Holdings currently has a consensus target price of $66.07, indicating a potential upside of 14.31%. Given Lumentum Holdings’ higher probable upside, equities analysts plainly believe Lumentum Holdings is more favorable than Gilat Satellite Networks.

Insider and Institutional Ownership

95.7% of Lumentum Holdings shares are owned by institutional investors. Comparatively, 8.0% of Gilat Satellite Networks shares are owned by institutional investors. 0.8% of Lumentum Holdings shares are owned by insiders. Comparatively, 1.1% of Gilat Satellite Networks shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Lumentum Holdings -10.25% 18.12% 9.48%
Gilat Satellite Networks 1.27% 6.59% 3.70%

Volatility and Risk

Lumentum Holdings has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500. Comparatively, Gilat Satellite Networks has a beta of 0.78, meaning that its stock price is 22% less volatile than the S&P 500.

Summary

Lumentum Holdings beats Gilat Satellite Networks on 10 of the 13 factors compared between the two stocks.

About Lumentum Holdings

Lumentum Holdings Inc. is a provider of optical and photonic products for a range of end market applications, including data communications (Datacom) and telecommunications (Telecom) networking and commercial lasers (commercial lasers) for manufacturing, inspection and life-science applications. The Company operates in two segments: Optical Communications (OpComms) and Commercial Lasers (Lasers). The Company’s OpComms products include a range of components, modules and subsystems to support and maintain customers in its two primary markets: Telecom and Datacom. The Company’s Lasers products serve customers in markets and applications, such as manufacturing, biotechnology, graphics and imaging, remote sensing, and precision machining, such as drilling in printed circuit boards, wafer singulation and solar cell scribing. The Company’s customers include original equipment manufacturers (OEMs).

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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