Three satellite stocks to buy for profiting from on high offer investors a chance to benefit amid rising demand for mobile, global connectivity.
The three satellite stocks to buy for profiting are showing promise, particularly with increased defense spending from the United States and allied governments. The buyers of such services span the globe.
Satellite communications provide global connectivity on land, in the air and at sea. The communications can include voice, data and internet capabilities, as well as encrypted services. Companies in the satellite business are looking to grow, and potential consolidation could offer an additional exit strategy for investors.
Three Satellite Stocks to Buy for Profiting from on High: IRDM
Iridium Communications Inc. (NASDAQ: IRDM), a former recommendation of Bryan Perry, who heads the Cash Machine investment newsletter and the Hi-Tech Trader advisory service, also is in the same low-Earth-orbit (LEO) satellite services communications market that includes Covington, Louisiana-based Globalstar, Inc. (NASDAQ: GSAT).
Bryan Perry heads the Cash Machine investment newsletter and Hi-Tech Trader.
Iridium is the only provider of satellite communication with complete global coverage, said Michelle Connell, who heads Portia Capital Management in Dallas. IRDM’s LEO network allows it to provide consistent and reliable communication across areas not covered by wireless or wireline, she said, adding that mission critical communication can be made across oceans, remote areas, war zones and geographies suffering from natural disasters.
The White House has proposed a $1 trillion defense budget for fiscal year 2026, continued Connell , a charter financial analyst. In addition, NATO countries are being pressed to increase their defense spending, she added.
The company’s customers include governments, travel providers, (airlines and railways), as well as commodity developers, (mining, oil and gas). Demand from these customers is inelastic and growing, Connell counseled. The company currently is building out a network to provide the next generation of connectivity between people and devices, she added.
“The services will be delivered through a combination of the company’s non-terrestrial network and the technology that was acquired with the Satelle acquisition in 2024,” Connell said. “Satelle’s technology provides high security for IRDM’s customers and compliments IRDM’s current technology.”
Michelle Connell owns and is chief investment officer of Portia Capital Management.
Iridium’s management is offering guidance of revenue growth reaching 10%, and its net profit margin expanding from 10% to 14%.
“The one thing that concerns me is the possibility of some of its production materials may be impacted by tariffs on Thailand,” Connell cautioned. “Due to its competitive advantage of complete global coverage, I do consider IRDM to be a much better investment than its competitors.”
Chart courtesy of www.StockCharts.com.
Three Satellite Stocks to Buy for Profiting from on High: GILT
Israel-based Gilat Satellite Networks Ltd. (NASDAQ: GILT) is rated “outperform” by Louie DiPalma, an aerospace and defense analyst with Chicago-headquartered investment firm William Blair & Co. Gilat reported strong defense growth of 34% and progress with its Boeing (NYSE: BA) Sidewinder line-fit agreement. However, revenue was negatively impacted by temporary renewal delays for operations in Peru.
“Profitability was also depressed due to low initial margins for Stellar Blu during its scaling phase,” DiPalma wrote in a recent research note.
Gilat is seeking to receive multiple large Sidewinder orders to add to its existing backlog, DiPalma wrote. The company successfully closed the acquisition of Stellar Blu Solutions LLC, a U.S.-based provider of next-generation satellite communications terminal solutions on Jan 7. The acquirer offered guidance that annual revenues from Stellar Blu should range between $120 and $150 million in 2025, based on the a “robust backlog” from the business.
“In addition, the acquisition is expected to be accretive on non-GAAP results for 2025,” DiPalma wrote.
Furthermore, once Stellar Blu reaches its target manufacturing capacity, which Gilat projects will occur in the second half of 2025, the EBITDA of the acquired business would have margins above 10%.
Chart courtesy of www.StockCharts.com.
“This acquisition is a pivotal step in our strategy to expand Gilat’s presence in the growing In-Flight Connectivity (IFC) market,” said Adi Sfadia, Gilat’s CEO, at the time of the purchase.
Stellar Blu is positioned to win a supplier partnership with Airbus over the next two years, DiPalma wrote. Gilat is one of the key global providers of modems, antennas, and solid state power amplifiers (SSPAs) in the highly strategic $3 billion satellite communications infrastructure market, he added.
“Shares of Gilat trade four times our 2025 adjusted EBITDA estimate,” DiPalma said. “We believe this valuation presents a buying opportunity given the dynamic growth potential made possible by its recent acquisitions of DataPath and Stellar Blu and the potential to further penetrate the IFC market. We see potential for both long-term organic growth acceleration and margin expansion after integration.”
Three Satellite Stocks to Buy for Profiting from on High: KRMN
Huntington Beach, California-based Karman Holdings (NASDAQ: KRMN) is looking to make one or two bolt-on transactions a year as it seeks to bolster both its design and manufacturing capabilities. Karman’s private equity sponsor appears to continue to be involved in sourcing deals, including the company’s most recent transaction, wrote Jason Gursky, Citigroup’s aerospace and defense analyst in a recent research note.
The company suggests that it is not interested in buying at auction or from venture capitalists, and that sellers appear to like the idea of combining with Karman as a way to preserve legacy and provide assets a path to continued growth given the company’s demonstrated success with most large space and defense prime contractors, Gursky continued. The pipeline appears full, with many sellers proactively approaching the company, particularly after Karman’s initial public offering (IPO) on February 13, 2025, Gursky wrote.
“Management does not feel it is capacity constrained at this point, and said it’s comfortable operating with leverage in the high twos, to low threes,” Gursky wrote in a May 27 research note. “There appears to be plenty of margin expansion opportunity, though it will likely be limited largely to operating expense leverage. At this point, the company expects gross margins to remain flat as it looks to remain cost competitive against its customer’s capabilities – which the company views to be its primary competition.”
However, Karman is making investments in automation to improve productivity – some of which can accrue to the company over time, Gurksy continued. Further, roughly 90% of revenue is tied to firm fixed price contracts, so margin mix could only head in one direction at this point. However, the company doesn’t expect it given customers’ focus on cost, Gursky wrote.
Chart courtesy of www.StockCharts.com.
As far as participating in the Golden Dome project of President Trump to defend against all kinds of missiles from land, sea or space, Karman’s management is aware the project is planned to be built during the current administration’s tenure. Thus, it will need to rely in part on existing technologies such as THAAD, PAC-3, and SM-3/6, as well as those already in development, such as Next Generation Interceptor (NGI), Gursky wrote.
Further, the company’s management expressed hope it can participate in the system through existing unmanned aerial vehicle (UAV) and space launch programs, Gursky continued. Finally, there have been an industry day or two associated with the new system and there could well be new technologies introduced to help support it, including several of which Karman might be able to help develop and manufacture over time, Gursky added.
Geopolitical Risk Rises
The conflict between Russia and Ukraine is escalating. It may create additional demand for service services, despite adding geopolitical risk. The three satellite stocks to buy for profiting from on high offer an opportunity to provide expanded communications services through the world.
