Gilat Satellite Networks (GILT) is a Zacks Rank #5 (Strong Sell) after the company recently posted a miss but the stock has soared since that earnings report. This article will look at why this stock is a Zacks Rank #5 (Strong Sell) as it is the Bear of the Day.
Description
Gilat Satellite Networks Ltd. engages in the provision of broadband satellite communication and networking solutions and services. It operates through the following business segments: Fixed Networks, Mobility Solutions, and Terrestrial Infrastructure Projects. The Fixed Networks segment provides advanced fixed broadband satellite communication networks, satellite communication systems and associated professional services and comprehensive turnkey solutions and fully managed satellite network services solutions. The Mobility Solutions segment provides advanced on-the-move satellite communications equipment, systems, and solutions, including airborne, maritime and ground-mobile satellite systems and solutions. The Terrestrial Infrastructure Projects segment provides network infrastructure construction of the fiber and microwave network of PRONATEL in Peru. The company was founded by Yoel Gat, Gideon Kaplan, Amiram Levinberg, Joshua Levinberg, and Shlomo Tirosh in 1987 and is headquartered in Petah Tikva, Israel.
Earnings History
When I look at a stock, the first thing I do is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
In the case of Gilat Satellite Networks (GILT) I see the company has beat the Zacks Consensus Estimate in two of the last four quarters that Zacks has data for. This alone does not make the stock a Zacks Rank #1 (Strong Buy) and it doesn’t make it a Zacks Rank #5 (Strong Sell) either.
The Zacks Rank does care about the earnings history, but it is much more heavily influenced by the movement of earnings estimates.
Earnings Estimates
The Zacks Rank tells us which stocks are seeing earnings estimates move higher or in this case lower. For Gilat Satellite Networks (GILT) I see annual estimates moving lower of late.
The current fiscal year consensus number moved lower from $0.50 to $0.33 over the last 60 days.
The next year has moved from $0.76 to $0.72 over the last 60 days.
Negative movement in earnings estimates like that is why this stock is a Zacks Rank #5 (Strong Sell).
It should be noted that a lot of stocks in the Zacks universe are seeing negative earnings estimate revisions. That means that the stocks that are seeing small but negative earnings estimate revisions are falling to a Zacks Rank #5 (Strong Sell).
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Gilat Satellite Networks Ltd. (GILT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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