Freedom: Gilat’s price target could rise to $25 per share after acquiring Comtech unit

Israeli satellite communications technology company Gilat Satellite Networks (GILT) announced the acquisition of the Satellite & Space Communications (SS) business unit of U.S.-based Comtech Telecommunications. According to Freedom Broker analysts, the new asset could lift Gilat’s price target to $25 per share. With the stock currently trading at around $18, this implies upside potential of nearly 39%.

Gilat develops equipment and software solutions for satellite communications, including for corporate, government, and defense customers. Comtech’s Satellite & Space Communications unit manufactures secure and tactical satellite communications systems widely used in the defense sector.

Freedom believes the deal is a logical continuation of Gilat’s long-term strategy to strengthen its position in the defense communications market. The acquisition will allow the company to significantly scale up its business, reinforce its presence in the U.S., and expand its product lineup.

Analysts note that combining the assets will strengthen Gilat’s position in the secure satellite communications segment, where demand continues to grow from government and military organizations. In addition, the deal will enable the company to broaden its client base and gain access to new contracts in the U.S. market.

In an optimistic scenario, successful integration of the acquired business could support an increase in Gilat’s price target to $25. However, this will depend on the company’s ability to improve the efficiency of the Comtech unit and bring its EBITDA margin closer to Gilat’s current profitability level.

Key risks highlighted by analysts include potential integration difficulties, lower-than-expected operating efficiency of the acquired business, and possible pressure on financial performance if the capital structure deteriorates after the deal closes.

This is not an individual investment recommendation.