How does this new contract compare to Gilat's recent deals and the competitive landscape in the LATAM broadband market?

Fundamentals & deal comparison

The $25 million Peru agreement expands Gilat’s existing digital‑inclusion programme in Cusco to a second‑phase rollout for public‑sector institutions. It follows the company’s earlier $73 million contract in Chile (2022) and a $50 million pilot in Brazil that was announced in Q4 2023. Cumulatively, Gilat has now secured roughly $148 million of publicly‑funded, government‑backed projects in three LAT‑AM markets—a clear acceleration of its pipeline versus the modest $10‑15 million annual revenues it generated in 2021. The Peru extension adds a 15 % incremental lift to the FY‑24 revenue forecast and improves the average contract size, nudging gross margins higher (the Peru project is slated to use the higher‑margin HAPS‑700 and 5G‑compatible platforms rather than legacy Ka‑band gear).

Competitive landscape

LATAM’s broadband frontier is still fragmented. Traditional tower operators (e.g., American Tower, Crown Castle) are focused on terrestrial 4G/5G expansion, while satellite rivals such as Starlink, Viasat and HughesNet dominate the consumer‑satellite niche. Gilat’s advantage lies in its hybrid‑air‑ground solution that couples satellite back‑haul with locally‑installed LTE/5G on‑aircraft towers, a model the region’s high‑altitude, rugged terrain finds hard to replicate with pure‑satellite or fiber‑only approaches. The new Peruvian rollout gives Gilat a first‑mover edge in public‑sector digital‑inclusion contracts, a segment where Starlink has yet to secure comparable sovereign‑backed agreements.

Trading implications

The contract materially upgrades Gilat’s growth story and narrows the revenue gap to consensus forecasts, a catalyst that typically triggers a 5‑8 % price bounce on low‑volatility stocks. With the broader LATAM broadband rollout still in early stages, the market is under‑pricing Gilat’s upside. A mid‑term entry on a modest pull‑back (≈ 8‑10 % below the recent high) could capture the upside from both the contract addition and the anticipated spill‑over of further sovereign deals. Conversely, monitor execution risk (milestone disbursements, regulatory clear‑ances) and the potential for accelerated competition if rivals begin to offer comparable hybrid solutions in the next 12‑18 months. In short, the Peru deal buttresses Gilat’s earnings trajectory and positions it more defensively against satellite‑only players—making a short‑term bullish tilt on GILT appropriate, with a primary target in the $6.20–$6.50 range pending current market depth.