Critical Analysis: SeaChange International (SEAC) & Gilat Satellite Networks (GILT)

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

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for SeaChange International and Gilat Satellite Networks, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SeaChange International 0 0 3 0 3.00
Gilat Satellite Networks 0 0 0 0 N/A

SeaChange International presently has a consensus target price of $4.25, suggesting a potential upside of 33.23%. Given SeaChange International’s higher possible upside, equities analysts plainly believe SeaChange International is more favorable than Gilat Satellite Networks.

Insider & Institutional Ownership

73.9% of SeaChange International shares are owned by institutional investors. Comparatively, 15.5% of Gilat Satellite Networks shares are owned by institutional investors. 2.9% of SeaChange International shares are owned by insiders. Comparatively, 1.1% of Gilat Satellite Networks shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
SeaChange International 17.06% -0.37% -0.25%
Gilat Satellite Networks 3.46% 7.35% 4.18%

Valuation and Earnings

This table compares SeaChange International and Gilat Satellite Networks’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
SeaChange International $80.27 million 1.42 $13.49 million $0.11 29.00
Gilat Satellite Networks $282.76 million 1.70 $6.80 million N/A N/A

SeaChange International has higher earnings, but lower revenue than Gilat Satellite Networks.

Risk and Volatility

SeaChange International has a beta of 0.59, suggesting that its stock price is 41% less volatile than the S&P 500. Comparatively, Gilat Satellite Networks has a beta of 0.9, suggesting that its stock price is 10% less volatile than the S&P 500.

SeaChange International Company Profile

SeaChange International, Inc. provides multiscreen video, advertising, and premium over the top (OTT) video products and services that facilitate the aggregation, licensing, management, and distribution of video and television advertising content to cable system operators, satellite operators, and telecommunications and media companies worldwide. It offers video products, including SeaChange Adrenalin, a multiscreen back office platform that enables service providers to manage, monetize, and deliver a seamless viewing experience across televisions, personal computers (PCs), tablets, smartphones, and other IP-enabled devices; and SeaChange AssetFlow, a content management solution that is used to receive, manage, and publish content for viewing on televisions, tablets, PCs, and other consumer devices, as well as SeaChange Rave, an OTT video platform that provides managed services for media companies and service providers. The company also provides advertising products, such as SeaChange Infusion, an advanced advertising platform to maximize advertising revenue across multiscreen, broadcast, on-demand, and OTT viewing. In addition, it provides Nucleus, a video gateway software that ports to third-party set-top boxes, or other customer premises equipment hardware and system on a chip, as well as acts as a hub for various video distribution to any IP-connected device throughout the home, such as tablets, smart phones, and game consoles; and SeaChange NitroX, an user experience product that empower service providers and content owners to optimize live and on-demand video consumption on multiscreen and OTT services. Further, the company provides professional, and maintenance and support services, as well as managed services. It sells and markets its products and services through a direct sales organization, as well as to systems integrators and value-added resellers. SeaChange International, Inc. was founded in 1993 and is headquartered in Acton, Massachusetts.

Gilat Satellite Networks Company Profile

Gilat Satellite Networks Ltd., together with its subsidiaries, provides broadband satellite communication (Satcom) network solutions and services worldwide. The company operates through Commercial, Mobility, and Services divisions. The company designs, manufactures, and provides network management and equipment for Satcom, as well as professional services to satellite operators and service providers. Its equipment consists of very small aperture terminals, solid-state power amplifiers, block up converters, low-profile antennas, and on-the-move/on-the-pause terminals. In addition, the company offers various solutions, including managed satellite communications services, network planning and optimization, satellite capacity, remote network operation, call center support, hub and field operations, and communication networks construction and installation services. Further, it provides connectivity services, Internet access, and telephony services to enterprise, government, and residential customers; and builds telecommunication infrastructure using fiber-optic and wireless technologies for broadband connectivity. Gilat Satellite Networks Ltd. sells its products and solutions to communication service providers and operators, mobile network operators, and system integrators, as well as to defense and homeland security organizations, and directly to end-users. The company was founded in 1987 and is headquartered in Petah Tikva, Israel.

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