Shares of GILT gained 5% after the company finished 2022 on a strong note and guided 2023 above expectations.  Despite the nice gain, the stock is still trading near its Covid-area lows notwithstanding the fact that 2023 is shaping up to look a lot like 2018-2019 profitability levels when the stock was regularly trading in the high single-digits. On a pure valuation basis, Gilat is now trading at 7.7x our 2023 AEBITDA estimate and 6.7x our 2024 estimate, which is toward the lower end of the 6-12x valuation range that ground equipment companies traded at pre-covid, and about half the multiple of Gilat’s closest peer, Comtech. Whatever reservations investors have should be answered if Gilat is able to deliver on its 2023 forecast.  Management’s abilty to achieve these lofty goals will be dependent on a number of factors, including execution, the macro economy, and the pace of major customer rollouts.  And maybe a big NGSO order for amplifiers?
Gross margins improved for the eighth consecutive quarter.
Opex grew double-digit for the second consecutive quarter, driven primarily by R&D.
Gilat reported its best quarterly (organic) operating cash flow in three years.
Satellite Networks grew double-digit for the second consecutive quarter (up 13% y/y).  We are forecasting 19% growth in 2023.
Record cellular backhaul orders in Q4.
Integrated Solutions grew ~27% in 2023 but fell flat in Q4 as two large customer rollouts appear to have passed the peak. We are expecting flat revenues in 2023.
Gilat bagged a large Peru receivable in Q4 but failed to receive final acceptance for the fifth Pronatel region.