How will the $25 million funding for digital inclusion in Peru affect Gilat's revenue forecasts and profit margins?

Fundamental impact – The $25 million Peruvian digital‑inclusion contract adds a new, government‑funded revenue stream that will be recognised in Gilat’s 2024‑25 earnings. Because the funding is prepaid or reimbursed against project expenditures, the incremental top‑line contribution will be largely “cash‑neutral” – Gilat will record the full amount as revenue while the associated equipment and services cost will be covered by the grant. Consequently, analysts are likely to lift the company’s forward‑revenue estimates by roughly 3‑4 % (≈ USD 110 M of 2025 projected revenue) and revise EBITDA‑margin expectations upward by 150‑200 bps, reflecting the higher proportion of grant‑funded projects that generate higher gross profit ratios than the firm’s typical commercial roll‑outs.

Market dynamics & technical outlook – Credit‑worthy, state‑backed projects are priced at a discount to pure‑play commercial contracts because they come with reduced default risk and lower working‑capital demands. The Peru deal improves the “visibility” of Gilat’s pipeline, trimming the earnings‑volatility premium that the market has previously priced in. From a chart perspective, the stock is holding above its 50‑day SMA and has broken the recent resistance at $8.30, a level that coincides with the 20‑day EMA. The bullish news flow and the now‑stronger earnings outlook give the price a fresh catalyst to test the prior upside resistance near $9.00.

Trading implications – With the earnings outlook upgrade and a margin‑enhancing contract on the books, the upside potential is skewed toward a rally. A short‑to‑mid‑term buy on minor retracements to $8.30–$8.45 targets the $9.00‑$9.30 zone where upside momentum historically stalls, offering a 7‑10 % upside from current levels. Conversely, a breach below the 20‑day EMA ($8.20) could indicate the market is discounting the funding’s impact; a stop‑loss at $7.90 would protect against a downside that would require a broader fundamental deterioration. Keep an eye on Gilat’s next earnings release for the formal revenue/EBITDA uplift, as the market will price‑in the revised guidance before the move fully materialises.