Polycom (PLCM) & Gilat Satellite Networks (GILT) Critical Analysis

Gilat Satellite Networks (NASDAQ: GILT) and Polycom (NASDAQ:PLCM) are both small-cap technology companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, valuation, institutional ownership, risk, profitability, dividends and analyst recommendations.

Institutional & Insider Ownership

7.9% of Gilat Satellite Networks shares are held by institutional investors. Comparatively, 92.4% of Polycom shares are held by institutional investors. 1.1% of Gilat Satellite Networks shares are held by company insiders. Comparatively, 0.7% of Polycom shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings for Gilat Satellite Networks and Polycom, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gilat Satellite Networks 0 0 0 0 N/A
Polycom 0 0 0 0 N/A

Profitability

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

Net Margins Return on Equity Return on Assets
Gilat Satellite Networks 2.83% 7.58% 4.20%
Polycom -3.47% -3.73% -2.23%

Valuation & Earnings

This table compares Gilat Satellite Networks and Polycom’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 $279.55 million 1.52 -$5.34 million $0.15 51.87
Polycom N/A N/A N/A $0.16 77.94

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

Volatility and Risk

Gilat Satellite Networks has a beta of 0.96, meaning that its share price is 4% less volatile than the S&P 500. Comparatively, Polycom has a beta of 1.41, meaning that its share price is 41% more volatile than the S&P 500.

Summary

Gilat Satellite Networks beats Polycom on 5 of the 9 factors compared between the two stocks.

Gilat Satellite Networks Company Profile

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.

Polycom Company Profile

Polycom, Inc. (Polycom) offers solutions for voice, video and content sharing and a line of support and service solutions. The Company operates in Americas; Europe, Middle East and Africa (EMEA), and Asia Pacific (APAC) geographic segments. The Company’s video, voice and content-management and content-sharing solutions include applications for mobile devices, browser-based video collaboration, cloud-delivered services, conference room systems and home/work office solutions and immersive telepresence. It offers various products and solutions, which include UC Group Systems, UC Platform and UC Personal Devices. UC Group Systems includes group video, group voice and immersive telepresence systems. UC Platform includes universal collaboration servers, virtualization management, resource management, recording and streaming, and remote access technologies that constitute the RealPresence Platform. UC Personal Devices includes group video, group voice and immersive telepresence systems.

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