KVHI vs. GILT: Which Satellite Communications Stock Is the Better Buy?

Stock Performance & Valuation: KVHI vs. GILT

KVHI (down 5.7%) has outperformed GILT (down 34.1%) over the past three months. In the past year, KVH Industries has surged 75% compared with Gilat’s gain of 45.4%.

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Meanwhile, KVHI is trading at a trailing 12-month enterprise value-to-sales (EV/S) ratio of 1.04X, above its median of 0.61X over the past five years. GILT’s trailing 12-month EV/S multiple sits at 1.46X, above its last five-year median of 1.10X. KVHI and GILT both appear to be cheap when compared with the Zacks Computer and Technology sector’s average of 8.73X.

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Factors Driving KVH Industries Stock

KVH Industries is steadily shifting its business toward recurring, subscription-based revenues generated from connectivity, content and managed services. Airtime services account for the vast majority of sales, while value-added offerings such as cybersecurity, crew welfare content, bandwidth management and managed IT deepen customer relationships and create additional monetization opportunities. This model not only improves revenue visibility but also increases customer stickiness by integrating multiple services into a single communications platform. KVHI's return to profitability in the first quarter of 2026 underscores the earnings potential of this transition.

KVH Industries is benefiting from the maritime industry's transition toward multi-orbit connectivity that combines geosynchronous orbit (GEO), low-earth-orbit (LEO) and cellular networks. The company continues to expand its offerings through Starlink and Eutelsat OneWeb while broadening its presence in markets such as India and Latin America. Management also reported record connectivity terminal shipments and continued subscriber growth during the first quarter of 2026, providing a larger installed base that can translate into future service activations and recurring revenue growth.

KVH Industries is simplifying its operating structure by winding down in-house manufacturing and transitioning customers to compatible third-party hardware. This allows the company to reduce capital-intensive operations and concentrate resources on higher-value connectivity, software and managed services. An asset-light model should improve operating flexibility, support margin expansion over time and enable management to respond more quickly as satellite communications technologies continue to evolve.

Factors Driving Gilat Stock

Defense has become one of Gilat's primary growth engines as the company broadens its presence across the United States, Europe and other international markets. Through its DataPath, Wavestream and Gilat Defense businesses, the company provides mission-critical communications, portable gateways and multi-orbit SATCOM solutions that address growing demand for resilient battlefield connectivity. Recent contract wins from U.S. and European defense customers reinforce its competitive positioning and deepen customer relationships, while the segment's strong execution also contributed to improved profitability in the first quarter of 2026.

Gilat is well positioned to benefit from the satellite industry's migration toward multi-orbit architectures across aviation, mobility and enterprise communications. Its portfolio of electronically steered antennas, software-defined networking platforms and ground infrastructure enables customers to seamlessly integrate GEO, LEO and future satellite constellations. Growing demand for next-generation in-flight connectivity, strategic collaborations such as its Boeing line-fit program and continued customer adoption of Sidewinder terminals underscore the long-term opportunity as satellite operators modernize their networks.

Acquisitions are playing an increasingly important role in Gilat's long-term growth strategy by expanding both its capabilities and market reach. The additions of DataPath and Stellar Blu strengthened the company's presence in defense and aviation communications, while the planned acquisition of Comtech's Satellite & Space Communications business would significantly expand its U.S. footprint, engineering capabilities and technology portfolio. Management expects the larger platform to unlock cross-selling opportunities, operational synergies and greater scale, enhancing GILT’s ability to compete for larger, more complex communications programs over time.

Choose KVHI Over GILT Now

Both KVH Industries and Gilat are well positioned to benefit from the long-term growth of satellite communications, but they offer investors different investment profiles. KVHI is executing a focused transformation toward a higher-quality business built around recurring connectivity and managed services. Its transition to an asset-light operating model, combined with increasing subscription-based revenue, is improving earnings visibility while allowing management to concentrate on expanding its core maritime communications franchise.

Gilat offers a broader growth platform spanning defense, commercial satellite networking, aviation connectivity and enterprise communications. Its continued investment in multi-orbit technologies and strategic acquisitions has expanded its addressable markets and strengthened its competitive position. However, sustaining this growth will depend on successful execution across multiple initiatives as GILT continues to integrate acquisitions and pursue larger opportunities.

From a valuation standpoint, both companies appear attractively priced relative to the broader sector, suggesting investors are not paying excessive premiums for their long-term growth potential. However, KVHI trades at a lower valuation than GILT, offering investors exposure to favorable industry trends at a comparatively more reasonable price.

While both stocks have compelling long-term prospects, KVH Industries appears to be the better buy. Its simpler business model, expanding base of recurring revenue, improving profitability and relatively more attractive valuation provide a compelling balance of growth potential and execution visibility for long-term investors.

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This article originally published on Zacks Investment Research (zacks.com).

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