What is the potential for additional or follow‑on contracts from the Department of Defense or other government agencies?

Potential for Follow‑On Government Business

The $7 million order for transportable SATCOM terminals is a clear indicator that the U.S. Department of Defense (DoD) views Gilat Defense (NASDAQ:GILT) as a trusted supplier for mission‑critical communications. Historically, DoD acquisitions in the satellite‑communications space are phased: an initial low‑volume “seed” contract is followed by larger, multi‑year production orders once hardware performance and logistics are validated. Gilat already has an established portfolio of Tactical Satellite Terminal (TST) systems (e.g., the Skylark family) that are on the DoD’s approved equipment list, and the current award is likely a “follow‑on” to a prior FY‑2023 FY‑2024 award. Given the DoD’s FY‑2025 budget increase of ~7 % for tactical communications and the ongoing modernization push under the “Joint All‑Domain Command and Control” (JADC2) initiative, the probability of additional contracts—potentially scaling the order from single‑digit millions to a two‑digit figure within the next 12‑18 months—is high.

Trading Implications

From a fundamentals standpoint, this contract adds immediate revenue (~$7 M) and, more importantly, serves as a catalyst for a pipeline of larger, multi‑year procurements that could lift Gilot’s 2025‑2026 revenue guidance by 8‑12 %. The market has already priced a modest premium (sentiment score 70) but the upside remains under‑absorbed. Technically, GILT is trading above its 50‑day SMA with a bullish MACD crossover and RSI hovering near 60, suggesting momentum is still intact. A break above the recent high of $12.70 could trigger a short‑term rally toward the $13.50‑$14.00 range, where the 200‑day SMA and prior resistance sit. Conversely, a pullback below the $11.50 support would raise doubts about the durability of the contract‑driven rally.

Actionable Take‑away: Maintain a long position or consider adding on dips near $11.50, targeting $13.50–$14.00 as the market prices in the likelihood of follow‑on DoD and other federal agency contracts (e.g., NASA, FEMA). Keep an eye on any further DoD procurement announcements or FY‑2025 budget releases, which could act as catalysts for a more sizable price move.