Gilat Satellite Networks (NasdaqGS:GILT) opened 2026 with Q1 revenue of US$110.5 million and basic EPS of US$0.07. This set the tone for how its growth story is feeding through to the bottom line. The company reported revenue of US$92.0 million and an EPS loss of US$0.11 in Q1 2025, compared to revenue of US$110.5 million and an EPS profit of US$0.07 in Q1 2026. Trailing 12 month EPS is US$0.50 on revenue of US$470.1 million, which points to earnings growth supported by wider net margins. For investors, an important takeaway is that profitability is increasingly being driven by better margins rather than volume alone.

See our full analysis for Gilat Satellite Networks.

With the headline numbers on the table, the next step is to see how this margin story lines up with the dominant narratives around Gilat, and where the latest results challenge expectations.

130% earnings growth meets margin story

• Trailing 12 month net income reached US$32.0 million on US$470.1 million of revenue, compared with US$13.9 million on US$321.4 million a year earlier, which lines up with the 130.1% year over year earnings growth and an improved net margin from 4.3% to 6.8%.
• Consensus narrative points to expanding satellite contracts and higher margin software and mobility offerings as key earnings drivers, and the current figures partly back that up but also show some pressure:
  • Revenue over the last 12 months is US$470.1 million versus US$321.4 million a year before, which supports the idea of a larger addressable market and contract wins feeding into the top line.
  • At the same time, commentary notes gross margins easing from 36.8% to 32.9%, so the higher net margin and larger earnings pool rely on controlling costs even as some product lines carry lower gross profitability.

Quarterly EPS stabilises after prior loss

• On a quarterly view, Basic EPS moved from an EPS loss of US$0.11 in Q1 2025 to a Basic EPS of about US$0.07 in Q1 2026, with net income shifting from a loss of US$6.0 million to a profit of US$5.2 million over that period.
• Bulls argue that longer term adoption of satellite connectivity, government digital inclusion projects and mobility solutions can support more recurring, higher margin earnings, and the recent quarterly pattern gives some support but also shows moving pieces under the surface:
  • Across the last four reported quarters, Basic EPS has ranged from about US$0.07 to US$0.17, with quarterly net income between roughly US$5.2 million and US$9.8 million, which is consistent with a business that is profitable but still sensitive to contract timing and mix.
  • Analysts also expect earnings to grow around 22.7% per year over the next three years while revenue is forecast to grow about 10.4% annually, so any delays in areas like Stellar Blu or large government projects would directly matter for how close results come to those growth expectations.

On top of these quarterly swings, bulls are watching whether recurring software and mobility revenue can keep earnings growth closer to that 22.7% pace over time, or if contract timing makes results bumpier than the optimistic narrative suggests. 🐂 Gilat Satellite Networks Bull Case

Valuation, dilution and a mixed risk profile

• Gilat trades at a P/E of 38.1x on a share price of US$16.08, compared with a peer average P/E of 45.4x and a US communications industry average of 36.3x, while a DCF fair value of about US$10.97 is below both the market price and the US$19.00 analyst price target.
• Bears focus on capital structure and pricing, and the current data gives them several concrete points to work with alongside the growth story:
  • Substantial shareholder dilution over the past year means each share now represents a smaller claim on that US$32.0 million of trailing net income, which is a direct headwind even when earnings are growing.
  • The combination of a 38.1x P/E, market price of US$16.08 above the DCF fair value of US$10.97, and a relatively modest gap to the US$19.00 analyst target leaves less room for error if revenue grows closer to the forecast 10.4% rate than the higher growth bulls are hoping for.

For anyone worried that dilution and a premium to DCF fair value could cap returns, it is worth seeing how critics frame those concerns next to the growth case in the full bear narrative. 🐻 Gilat Satellite Networks Bear Case

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Gilat Satellite Networks on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

With both risks and rewards in play for Gilat, now may be a good time to review the figures yourself and pressure test the story. To quickly see the mix of potential upsides and concern points in one place, check out the 2 key rewards and 2 important warning signs

See What Else Is Out There

Gilat's high 38.1x P/E, shareholder dilution and market price above its DCF fair value highlight valuation pressure that could limit upside if expectations slip.

If you are uneasy about paying up for that kind of uncertainty, shift your focus to companies screened as 46 high quality undervalued stocks and move on potential ideas today.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.