Elbit Systems Ltd. (ESLT) | Investment Case

1. Company Snapshot

1.a. Company Description

Elbit Systems Ltd.develops and supplies a portfolio of airborne, land, and naval systems and products for the defense, homeland security, and commercial aviation applications primarily in Israel.The company offers military aircraft and helicopter systems; commercial aviation systems and aerostructures; unmanned aircraft systems; electro-optic, night vision, and countermeasures systems; naval systems; land vehicle systems; munitions, such as precision munitions for land, air, and sea applications; command, control, communications, computer, intelligence, surveillance and reconnaissance, and cyber systems; electronic warfare and signal intelligence systems; and other commercial activities.

It also manufactures and sells data links and radio communication systems and equipment, and cyber intelligence, autonomous, and homeland security solutions; laser systems and products; guided rocket systems; and armored vehicle and other platforms survivability and protection systems, as well as provides various training and support services.The company markets its systems and products as a prime contractor or subcontractor to various governments and companies.It also has operations in the United States, Europe, Latin America, the Asia-Pacific, and internationally.

The company was incorporated in 1966 and is based in Haifa, Israel.

Show Full description

1.b. Last Insights on ESLT

Elbit Systems' recent performance was impacted by concerns over valuation and cash flows, despite a strong backlog and growth prospects. The company's Q3 2025 earnings call revealed a $25.2 billion backlog and 12% sales growth, but flat operating cash flow tempered enthusiasm. A $2.3 billion international contract and $210 million in tank upgrade contracts from the Israel Ministry of Defense were announced, but a hold rating was maintained due to valuation concerns (Source: Elbit Systems: Backlog Supports Growth, But Valuation And Cash Flows Limit Upside).

1.c. Company Highlights

Last Price	484.6
Change Percentage	0.94%
Open	485.0
Previous Close	480.11
Market Cap ( Millions)	22475
Volume	92582
Year High	529.99
Year Low	243.51
M A 50	487.23
M A 200	438.5

FCF Yield	2.85%
Dividend Yield	0.55%
ROE	11.83%
Debt / Equity	31.34%
Net Debt / EBIDTA	155.13%
Price To Book	5.6
Price Earnings Ratio	54.92
Price To FCF	35.11
Price To sales	2.99
EV / EBITDA	32.53

2. Elbit Systems' Q3 2025 Earnings: Strong Revenue Growth and Strategic Wins

Elbit Systems reported a robust third quarter in 2025, with revenues reaching $1.922 billion, a 12% year-over-year increase. The company's GAAP gross margin stood at 24.9%, while its non-GAAP gross margin was slightly higher at 25.2%. GAAP operating income was $171.4 million, or 8.9% of revenues, and non-GAAP operating income was $186.7 million, or 9.7% of revenues. Diluted EPS came in at $2.80, exceeding analyst estimates of $2.75, and non-GAAP diluted EPS was $3.35. The order backlog as of September 30, 2025, was $25.2 billion, a 15% increase from the end of 2024, driven in part by a significant $2.3 billion international contract win.

Publication Date: Nov -19

                                    📋 Highlights
                                    Revenue Growth::
                                                Q3 2025 revenue rose 12% to $1.922 billion, driven by strong performance in C4I/Cyber and Land segments.
Margin Expansion::
                                                Non-GAAP gross margin improved to 25.2%, with operating income at 9.7% of revenue ($186.7 million).
Earnings Surge::
                                                Diluted EPS jumped 58% to $2.80, while non-GAAP EPS reached $3.35 (up 89% YoY).
Backlog Growth::
                                                Order backlog hit $25.2 billion (+15% YoY), including a $2.3 billion international contract for a strategic solution.
Liquidity & Dividend::
                                                Free cash flow of $101 million supported a $0.75 per share dividend, reflecting financial stability.

                                

Segment Performance

The company's revenues by segment showed varied performance, with Aerospace decreasing 3% due to lower Precision Guided Munition sales in Asia Pacific, while C4I and Cyber increased 14%, ISTAR and EW rose 5%, and Land revenue jumped 41%. Elbit Systems of America decreased 2%. The diversified growth across segments contributed to the overall revenue increase.

Cash Flow and Dividend

Elbit Systems generated solid free cash flow of $101 million and declared a dividend of $0.75 per share. The company's ability to produce strong cash flow is a positive indicator of its financial health, and the dividend declaration is a welcome move for income-seeking investors.

Outlook and Valuation

The company is optimistic about its prospects, particularly in the U.S. market, where it sees opportunities for growth through potential acquisitions and expansion into areas such as border protection and drone swarms. Analysts estimate revenue growth of 11.2% for next year. With a current P/E Ratio of 58.63 and EV/EBITDA of 34.62, the market appears to be pricing in significant growth expectations. The Dividend Yield stands at 0.5%, and the Free Cash Flow Yield is 2.67%. As Elbit Systems continues to invest in its international operations and expand its presence in key markets, its valuation metrics will be closely watched to assess whether the current price reflects the company's growth prospects.

Strategic Opportunities

The recent ceasefire in Israel is expected to allow Elbit Systems to regroup and focus on its international business, which accounts for 70% of its revenue. The company is poised to capitalize on new opportunities and strengthen its backlog, potentially driving further growth and improving profitability. While the company does not provide specific guidance for 2026, its aim to continue improving profitability and cash conversion is a positive sign for investors.

3. NewsRoom

Arrowstreet Capital Limited Partnership Purchases 101,083 Shares of Elbit Systems Ltd. $ESLT

Dec -03

Source: defenseworld.net

KTOS vs. ESLT: Which Defense Stock Leads the Unmanned Systems Boom?

Nov -25

Source: zacks.com

Elbit Systems Ltd. $ESLT Holdings Lifted by Creative Planning

Nov -24

Source: defenseworld.net

Elbit Systems: Backlog Supports Growth, But Valuation And Cash Flows Limit Upside

Nov -19

Source: seekingalpha.com

Elbit Systems Awarded Contracts in an Aggregate Amount of $210 Million from Israel Ministry of Defense for Tank Upgrades

Nov -19

Source: prnewswire.com

Elbit Systems Ltd. (ESLT) Q3 2025 Earnings Call Transcript

Nov -18

Source: seekingalpha.com

Elbit Systems (ESLT) Surpasses Q3 Earnings Estimates

Nov -18

Source: zacks.com

ELBIT SYSTEMS REPORTS THIRD QUARTER 2025 RESULTS

Nov -18

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.74%)

6. Segments

Aerospace

Expected Growth: 5.5%

Elbit Systems' 5.5% growth in Aerospace is driven by increasing demand for unmanned aerial vehicles (UAVs), cyber security solutions, and electronic warfare systems. Government contracts, particularly from Israel and the US, contribute significantly to revenue growth. Additionally, the company's focus on innovation, R&D investments, and strategic acquisitions further support its expansion in the aerospace sector.

Elbit Systems of America

Expected Growth: 5.8%

Elbit Systems of America's 5.8% growth is driven by increasing demand for advanced defense electronics, unmanned aerial systems, and cyber security solutions. The company's strategic acquisitions, investments in R&D, and strong relationships with the US Department of Defense and other government agencies also contribute to its growth.

Land

Expected Growth: 5.2%

Elbit Systems Ltd.'s 5.2% growth in Land segment is driven by increasing demand for unmanned turrets and weapon stations, growing adoption of autonomous and artificial intelligence-based solutions, and expansion into new markets such as Asia and Latin America, further supported by strategic acquisitions and partnerships.

Intelligence, Surveillance, Target Acquisition and Reconnaissance and Electronic Warfare

Expected Growth: 6.2%

Elbit Systems' 6.2% growth in Intelligence, Surveillance, Target Acquisition and Reconnaissance (ISTAR) and Electronic Warfare (EW) is driven by increasing demand for advanced defense systems, growing importance of network-centric warfare, and rising need for real-time intelligence gathering and analysis. Additionally, Elbit's innovative solutions, such as autonomous systems and AI-powered platforms, are contributing to its growth in these segments.

C4I and Cyber

Expected Growth: 6.5%

Elbit Systems' C4I and Cyber segments' 6.5% growth is driven by increasing demand for advanced communication and intelligence systems, cyber threats and security concerns, and growing adoption of digital battlefield management solutions. Additionally, Elbit's strategic acquisitions and partnerships, as well as its focus on R&D, contribute to its growth momentum.

7. Detailed Products

Unmanned Aerial Vehicles (UAVs)

Elbit Systems' UAVs are designed for surveillance, reconnaissance, and combat missions, offering advanced capabilities and real-time data transmission.

Electronic Warfare (EW) Systems

Elbit Systems' EW systems provide advanced electronic attack and defense capabilities, enabling forces to detect, identify, and neutralize threats.

C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance) Systems

Elbit Systems' C4ISR systems integrate sensors, communications, and intelligence to provide situational awareness and decision-making capabilities.

Land Systems

Elbit Systems' land systems include armored vehicles, artillery, and mortar systems, providing advanced firepower and protection capabilities.

Naval Systems

Elbit Systems' naval systems include combat management systems, sensors, and electronic warfare capabilities for naval vessels.

Cyber Solutions

Elbit Systems' cyber solutions provide advanced threat detection, incident response, and cybersecurity services for governments and enterprises.

Training and Simulation Systems

Elbit Systems' training and simulation systems provide realistic and immersive training environments for military and civilian personnel.

8. Elbit Systems Ltd.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Elbit Systems Ltd. operates in a niche market with high barriers to entry, reducing the threat of substitutes.

Bargaining Power Of Customers

While Elbit Systems Ltd. has a diverse customer base, some customers, such as government agencies, may have significant bargaining power.

Bargaining Power Of Suppliers

Elbit Systems Ltd. has a diversified supply chain, reducing its dependence on individual suppliers and minimizing their bargaining power.

Threat Of New Entrants

The defense industry has high barriers to entry, including significant capital requirements and regulatory hurdles, making it difficult for new entrants to compete with Elbit Systems Ltd.

Intensity Of Rivalry

The defense industry is highly competitive, with several established players competing for a limited number of contracts, increasing the intensity of rivalry.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	27.24%
Debt Cost	3.95%
Equity Weight	72.76%
Equity Cost	3.45%
WACC	3.58%
Leverage	37.43%

11. Quality Control: Elbit Systems Ltd. passed 3 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Dassault Aviation

A-Score: 5.7/10

Value: 2.3

Growth: 6.0

Quality: 6.5

Yield: 5.0

Momentum: 9.0

Volatility: 5.3

1-Year Total Return ->

Accelleron

A-Score: 5.3/10

Value: 0.9

Growth: 4.7

Quality: 6.8

Yield: 3.1

Momentum: 9.5

Volatility: 7.0

1-Year Total Return ->

MTU Aero Engines

A-Score: 4.9/10

Value: 2.2

Growth: 6.1

Quality: 5.5

Yield: 1.2

Momentum: 8.5

Volatility: 6.0

1-Year Total Return ->

Leonardo

A-Score: 4.4/10

Value: 1.7

Growth: 6.8

Quality: 4.0

Yield: 1.2

Momentum: 10.0

Volatility: 2.7

1-Year Total Return ->

QinetiQ

A-Score: 4.2/10

Value: 5.0

Growth: 4.4

Quality: 2.4

Yield: 2.5

Momentum: 7.5

Volatility: 3.7

1-Year Total Return ->

Elbit Systems

A-Score: 4.0/10

Value: 1.1

Growth: 6.2

Quality: 5.1

Yield: 1.9

Momentum: 5.0

Volatility: 4.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-1.98%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

3.58%

Elbit Systems Ltd. - IL0010811243

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on ESLT

1.c. Company Highlights

Medium Volatility

Average Growth

Average Quality

Earnings Beats

Lower Yield

Revenues Miss

Average Yield

Less Volatile

Expensive

Lower Growth

Revenues Beats

2. Elbit Systems' Q3 2025 Earnings: Strong Revenue Growth and Strategic Wins

Segment Performance

Cash Flow and Dividend

Outlook and Valuation

Strategic Opportunities

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.74%)

6. Segments

Aerospace

Expected Growth: 5.5%

Elbit Systems of America

Expected Growth: 5.8%

Land

Expected Growth: 5.2%

Intelligence, Surveillance, Target Acquisition and Reconnaissance and Electronic Warfare

Expected Growth: 6.2%

C4I and Cyber

Expected Growth: 6.5%

7. Detailed Products

Unmanned Aerial Vehicles (UAVs)

Electronic Warfare (EW) Systems

C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance) Systems

Land Systems

Naval Systems

Cyber Solutions

Training and Simulation Systems

8. Elbit Systems Ltd.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Elbit Systems Ltd. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

484.6$

Current Price

484.6$

Potential

-0.00%

12.e Scoring ^Insights

12.f DCF ^BETA