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what it is
Elbit makes defense electronics, drones, and upgrade kits for militaries and homeland security teams.
how it gets paid
Last year Elbit Systems made $6.8B in revenue. Defense electronics and command systems was the main engine at $3.0B, or 44% of sales.
what just happened
Elbit missed by 3.7% on EPS, with $3.35 versus $3.48 expected.
At a glance
A+ balance sheet — rock-solid finances — built to survive anything
75/100 earnings predictability — reasonably predictable
55.0x trailing p/e — you're paying up for this one
0.4% dividend yield — cash in your pocket every quarter
23.5% return on capital — every dollar works hard here
xvary composite: 75/100 — average
What they do
Elbit makes defense electronics, drones, and upgrade kits for militaries and homeland security teams.
You are not swapping this vendor with a quick purchase order. Elbit has 19,712 employees and systems that connect air, land, and sea. Leaving is painful because the buyer is not changing one part. It is changing the whole machine.
How they make money
$6.8B
annual revenue
Defense electronics and command systems
$3.0B
+10.0%
Upgrades and support services
$2.4B
+9.0%
Commercial avionics and aerostructures
$1.4B
+6.0%
The products that matter
airborne mission systems
Airborne & C4ISR Systems
$2.9B · +14% growth
This is the largest segment shown here at $2.9B. It matters because avionics, intelligence, and command systems tend to sit deep inside customer workflows once deployed.
largest shown segment
ground combat and naval systems
Land & Naval Systems
$2.4B · +12% growth
A recent $277M contract for 30mm turrets says modernization demand is real, not theoretical. At $2.4B, this is already a major business line.
$277M recent award
sensing, optics, and protection tech
Electro-Optics & Other
$1.5B · +8% growth
This $1.5B bucket is smaller, but it still matters because protection and sensing systems show up across multiple platforms. The $228M Bradley APS deal is the kind of program that keeps this piece relevant.
$228M aps contract
Key numbers
55.0x
Trailing P/E
Price to earnings ratio means price divided by profit. At 55.0x, you are paying $55 for $1 of trailing profit.
14.0%
Op margin
Operating margin means profit after running the business. At 14.0%, Elbit keeps 14 cents from each sales dollar before taxes and interest.
23.5%
Return on capital
Return on capital means profit on money tied up in the business. At 23.5%, management is still getting a strong payoff from the asset base.
$250M
Debt load
Long-term debt is only $250M, or 1% of capital. That is tiny next to a roughly $31B market value.
Financial health
A+
strength
- balance sheet grade A+ — near the highest rating possible
- risk rank 2 — safer than 80% of stocks
- price stability 65 / 100
- long-term debt $250M (1% of capital)
- net profit margin 9.5% — keeps 10 cents of every dollar in revenue
- return on equity 23% — $0.23 profit for every $1 investors have put in
A+ with balance sheet grade and risk rank standing out. your money faces less risk here than at most public companies.
Total return vs. market
You invested $10,000 in ESLT 3 years ago → it's now worth $42,240.
The index would have given you $13,880.
source: institutional data · total return
What just happened
missed estimates
Elbit missed by 3.7% on EPS, with $3.35 versus $3.48 expected.
Revenue sat at $6.8B on a trailing basis, and gross margin was 24.0%. The miss was small, but the valuation leaves little room for small misses.
$6.8B
revenue
$3.35
eps
24.0%
gross margin
the number that mattered
The $3.35 EPS print mattered most because it came in 3.74% below the $3.48 estimate, so the stock did not get a clean beat.
-
elbit systems’ offerings are in demand.heightened tensions around the globe have made western nations keen to strengthen their defense postures.
-
this company can help customers to prepare for threats across the air, land, and sea theaters.the home country of israel is working to ensure that its munitions inventories are at sufficient levels, following suppression activities in the gaza strip. given less-than-optimal relations with the united states, countries in europe are endeavoring to harden their armed forces against possible aggression from russia.
-
u.s. allies in asia are concerned about regional posturing by china and north korea.furthermore, president trump has warned certain countries in the caribbean and iran about potential interventions.
-
elbit has the hardware and systems to provide the west an edge in standing up to adversaries.
-
we suspect that elbit’s backlog has continued to trend toward the impressive $30 billion mark.
source: company earnings report, 2026
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What could go wrong
The top risk is backlog conversion into margin at a 55x earnings multiple. The backlog is impressive. The price already assumes it turns into profit without many mistakes.
high
valuation compression
At 55x trailing earnings, this is priced more like a scarce growth asset than a traditional defense contractor. If earnings growth cools, the multiple does not need to collapse to hurt you — it just needs to become more normal.
55.0x trailing p/e against a 9.5% net margin is a narrow margin for disappointment.
high
backlog execution risk
$30B of backlog sounds comforting until you remember it has to ship, bill, and convert into profit. Delays, cost overruns, or lower-margin mix could pressure a business that only keeps 9.5 cents of profit per revenue dollar.
$30B backlog versus $13B annual revenue means this story stretches across multiple years of execution.
med
geopolitical concentration
Elbit benefits from elevated defense spending, but it is also tied to the politics around that spending. As an Israeli contractor, it carries regional, diplomatic, and perception risk that larger diversified primes can sometimes dilute more easily.
This risk can hit supply chains, customer appetite, and the valuation multiple at the same time.
med
contract timing risk
Recent awards of $228M and $277M help the narrative, but lumpy government contracts can make quarter-to-quarter momentum look cleaner than it really is. A quiet award period would matter more here because the stock has already run 85% this year.
Momentum investors are watching order flow almost as closely as earnings.
At 55x earnings and a 9.5% net margin, you do not need a broken business to lose money here. You just need growth to look less perfect.
source: institutional data · regulatory filings · risk analysis
Pay attention to
calendar
q4 2025 earnings report
Report due March 17, 2026. Consensus EPS is $3.23. In a 55x stock, the beat matters less than what management says about backlog conversion and margin from here.
trend
backlog staying near $30B
The backlog is the entire valuation support beam. If it stalls, the market stops treating ESLT like a rare asset and starts treating it like a normal contractor.
metric
margin versus revenue growth
Revenue can grow and still disappoint if mix shifts or execution slips. With a 9.5% net margin, you want to see profit conversion keep up with the backlog story.
risk
pace of new contract wins
The recent $505M from two disclosed awards helped. You want more of that. A slower contract tape would expose how much of this rally depends on fresh confirmation.
Analyst rankings
earnings predictability
75 / 100
This says results are more stable than the average stock, but not perfectly smooth. In human-speak: analysts trust management more than they trust most defense-cycle stories.
risk rank
2
Risk rank 2 means the balance sheet and business profile look safer than about 80% of public companies. That's a comfort on the company side, not necessarily on the valuation side.
source: institutional data
Institutional activity
institutions have been net buying for 3 consecutive quarters — 197 buyers vs. 104 sellers in 3q2025. total institutional holdings: 9.8M shares. net buying for 3 quarters.
source: institutional data
Price targets
3-5 year target range
$365
$852
$676
current price
$609
target midpoint · 10% from current · 3-5yr high: $852
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