Elbit Systems is posting strong revenue and EPS growth, backed by a $30.2B backlog and demand in land systems, EW, and C4I. The stock still screens expensive, so the report lands on a Hold despite solid execution.
Elbit Systems Ltd. (ESLT) combines strong operating momentum, a $30.2B backlog, and exposure to high-priority defense technologies with a valuation that demands continued execution. Q1 2026 revenue reached $2.19B, up 15.5% year over year, while GAAP diluted EPS rose to $3.34 from $2.35. The report's fair value estimate is $850.00, modestly above the quoted price of $821.00, supporting a Hold recommendation for moderate-risk investors with a medium-term horizon.
The growth case rests on backlog conversion and segment mix. Backlog increased from $28.1B at December 31, 2025 to $30.2B at March 31, 2026, with 49% scheduled for execution during the remainder of 2026 and 2027. Land revenue rose 27% in Q1 2026, while C4I and Cyber and ISTAR and EW each grew 17%. Those figures give the company a visible order base in areas tied to ammunition, electronic warfare, radios, command systems, and high-power lasers.
The counterweight is valuation and risk concentration. Trailing P/E is 62.8x, PEG is 8.8x, and free-cash-flow yield is 3.0%. Elbit also reported net insider selling of 69,736 shares across seven sales on April 9, 2026. The balance sheet is healthier than it was in 2023, but the stock price already reflects a substantial portion of the company's improved earnings trajectory.
Elbit Systems, founded in 1966 and based in Haifa, Israel, develops defense and homeland-security technology for customers in Israel, North America, Europe, Asia-Pacific, Latin America, and other international markets. The company employs approximately 20,000 people and trades on Nasdaq under ESLT. Its portfolio covers airborne platforms, unmanned systems, precision-guided munition sensors, simulators, radios, cyber intelligence, electro-optics, electronic warfare, land systems, naval systems, and active protection.
The business operates through five segments: Aerospace; C4I and Cyber; ISTAR and EW; Land; and Elbit Systems of America. This structure gives Elbit exposure to both platforms and mission systems. It also creates cross-selling opportunities when a customer requires sensors, communications, command systems, protection, and sustainment in one program.
Elbit's revenue remains product-led. Product revenue was $7.30B, or 91.9% of 2025 revenue, while service revenue was $640.4M, or 8.1%. The service component is smaller, but defense programs often require support, training, upgrades, and sustainment after initial delivery, giving the installed base strategic value.
Land was the largest Q1 2026 segment by revenue at $714.6M, up from $560.8M in Q1 2025. External customer revenue reached $699.0M. Management attributed the increase mainly to ammunition and munition sales in Israel and Europe, placing Land at the center of the current demand cycle.
Aerospace generated $516.6M in Q1 2026 compared with $504.3M in Q1 2025. The 2% increase reflected project mix. The segment includes airborne platforms, unmanned aerial solutions, helmet-mounted displays, aerostructures, training systems, and commercial aviation products, creating a broad but more measured growth profile than Land or electronic warfare.
ISTAR and EW revenue rose to $423.1M from $361.0M. The 17% increase was driven mainly by airborne and land high-power laser systems and electronic warfare systems. This segment sits directly within the shift toward sensors, signal intelligence, survivability, and countermeasure capabilities.
C4I and Cyber revenue increased to $256.7M from $220.0M, with external customer revenue at $242.1M. The 17% growth rate reflected radio systems and command-and-control systems in Europe. Elbit Systems of America generated $277.0M versus $249.4M in the prior-year quarter, extending the company's access to U.S. government and defense programs.
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The clearest flagship program in the current data is the Enhanced Night Vision Goggle-Binocular, or ENVG-B, system for the U.S. Army. Elbit announced an approximately $212M contract for the systems, with deliveries scheduled through 2028. The program links Elbit's electro-optics, soldier systems, and U.S. defense presence in a multi-year award.
High-power laser systems provide a second important product pillar. Q1 2026 materials identified increased sales of airborne and land high-power laser systems as a driver of ISTAR and EW growth. That combination of a named multiyear night-vision program and accelerating laser sales shows how Elbit monetizes both established equipment and newer battlefield technologies.
The investment value of these products comes from their place inside larger defense architectures. Night vision, electronic warfare, command systems, and sensors are more useful when integrated with communications and battlefield networks. Elbit's portfolio allows it to sell such systems as part of broader modernization programs rather than relying on a single hardware category.
Elbit's main competitive advantage is systems integration. The company combines sensors, software, radios, platforms, electro-optics, and sustainment into end-to-end defense solutions. Its 2025 20-F describes competition as dependent on performance, reliability, life-cycle cost, responsiveness, and the ability to adapt to rapid technology change. Those criteria favor suppliers that can integrate several mission components into a qualified system.
Research and development supports that position. Gross R&D expense was $544.1M in 2024 and net R&D expense was $466.4M. The company's stated focus includes artificial intelligence, open-source software, faster time to market, and technologies aligned with customer requirements.
Elbit's investor materials identify top-three global positions in directed infrared countermeasures, helicopter and fixed-wing helmet-mounted displays, electronic warfare, laser systems, command and control, imaging systems, active protection systems, tactical radios, and artillery systems. A broad set of positions across those categories gives the company multiple paths to benefit from defense modernization.
That statement from CEO Bezhalel Machlis aligns with the reported Q1 figures: revenue growth of 15.5%, GAAP operating margin of 9.4%, and non-GAAP operating margin of 10.1%. The evidence supports an execution advantage, although the valuation leaves less room for operational surprises.
Elbit operates across Israel, the United States, and other international locations, with facilities tied to aerospace, land systems, technology equipment, and electronics. The company has responded to wartime operating pressure by relocating production lines, adding inventory, and adjusting logistics. Those actions support production continuity, but they also tie more working capital and management attention to supply execution.
The 20-F identifies export approvals, material shortages, and dependence on some single-source inputs as supply-chain risks. Delays in approvals for exports to Israel have affected the availability of components. For a defense supplier, the issue is operationally important because contract delivery schedules can extend over several years while customer requirements continue to change.
Cash generation provides some operating flexibility. Elbit produced $842.6M of operating cash flow and $598.4M of free cash flow in 2025, compared with $534.6M and $319.6M respectively in 2024. Q1 2026 operating cash flow was $281.0M, and free cash flow was $209.9M.
The global aerospace and defense market was estimated at approximately $899.7B in 2026 and projected at $1.19T by 2030, representing a 7.1% compound annual growth rate in one market estimate. Elbit's $8.23B trailing revenue base represents a focused position within that large market, with direct exposure to faster-growing electronics, munitions, cyber, and battlefield systems.
Several relevant submarkets are growing faster than the broad industry. Aerospace and defense cybersecurity was estimated at $17.0B in 2025 and projected at $25.3B by 2030, while integrated air and missile defense was estimated at $37.9B in 2025 and projected at $68.4B by 2030. Elbit's C4I, Cyber, ISTAR, EW, and active protection offerings place it near these spending priorities.
The loitering munition market was estimated at $5.36B in 2025 and projected at $13.26B by 2030. Elbit's land and precision-strike exposure gives it a route into that expansion, although the company remains diversified across multiple mission areas rather than being a pure-play munition supplier.
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Elbit serves governments, defense organizations, homeland-security agencies, law-enforcement customers, commercial aviation companies, and medical-instrumentation markets. The 20-F separately identifies the Israeli Ministry of Defense and the U.S. government as customer groups, while the operating segments extend the customer base into Europe, Asia-Pacific, and Latin America.
International diversification has improved. Approximately 71% of the $30.2B backlog at March 31, 2026 was outside Israel. That percentage reduces reliance on domestic Israeli procurement and gives Elbit access to allied modernization programs, although international awards also depend on export approvals and government policy.
Defense customers typically purchase qualified systems through long-cycle programs. The ENVG-B award provides an example: an approximately $212M U.S. Army contract with deliveries through 2028. Elbit's $1.4B European military-modernization contract, to be performed over five years, demonstrates the size and duration of the programs that can shape the revenue base.
Elbit competes with Israeli defense companies Israel Aerospace Industries and Rafael Advanced Defense Systems, as well as global primes including Lockheed Martin (LMT), Northrop Grumman (NOC), RTX (RTX), General Dynamics (GD), BAE Systems (BAESY), Safran, Rheinmetall, Hensoldt, Kongsberg, Aselsan, and Bharat Electronics.
Compared with the largest U.S. primes, Elbit is smaller and less focused on major aircraft and naval platforms. Its strength is concentrated in subsystems, electronics, electronic warfare, soldier systems, land equipment, and integrated battlefield networks. That focus can improve competitiveness in specialized programs, while larger rivals retain advantages in scale, resources, and platform access.
Elbit also faces smaller defense-technology companies that compete through faster development cycles. The company's response is a combination of R&D spending, operationally proven systems, geographic reach, and integrated offerings. The $30.2B backlog and the 17% growth rates in both C4I and Cyber and ISTAR and EW show that this strategy is producing current demand.
Global power competition and geopolitical tension are supporting defense modernization. Industry research identifies autonomy, decision intelligence, cyber resilience, electronic warfare, unmanned systems, and integrated air and missile defense as priority areas. These themes match Elbit's product mix and help explain why backlog reached $30.2B.
The Israel security environment is both a demand driver and an operating risk. Elbit's 20-F describes the economic, military, and social consequences of the Swords of Iron war and identifies regional instability, trade interruption, and operating disruption as material risks. The company also reported that backlog growth in Q1 2026 was driven mainly by Israel and Asia.
Allied procurement and local-sourcing policies create additional opportunity. Elbit's business materials cite Israel's Blue and White strategy, which favors local defense production. At the same time, defense exports require government approvals, and the 20-F records delays and stricter approvals affecting components and deliveries. The macro backdrop is therefore favorable for demand but uneven for execution.
The balance sheet is healthier than it was in 2023, but the report still flags valuation and execution risk as the stock trades on a 62.8x trailing P/E and 8.8x PEG.
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Get Full Access →Q1 2026 revenue climbed 15.5% to $2.19B and GAAP diluted EPS jumped to $3.34 from $2.35, showing broad operating momentum across key defense segments.
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Get Full Access →Backlog rose from $28.1B to $30.2B, with 49% scheduled for execution in 2026 and 2027, giving the company visible revenue support over the next two years.
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Get Full Access →At 62.8x trailing earnings, 8.8x PEG, and a 3.0% free-cash-flow yield, the shares already price in much of Elbit's improved earnings trajectory.
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Get Full Access →The report's fair value estimate is $850, just above the quoted $821 price, which keeps the stock in Hold territory for moderate-risk investors.
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Get Full Access →Elbit Systems enters the medium-term period with unusually strong operational evidence. Revenue reached $7.94B in 2025, free cash flow reached $598.4M, backlog climbed to $30.2B, and Q1 2026 delivered double-digit growth across the core expansion segments. The balance sheet and earnings profile have both improved materially since 2023.
The stock is a capable defense technology compounder, but capability and price are separate questions. At $821.00, the market already credits Elbit for much of its backlog strength and forward earnings growth. A Hold stance preserves exposure to the defense modernization cycle while requiring a better entry price before taking a more aggressive position.
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Elbit Systems Ltd. (ESLT) drops sharply even after reporting strong Q2 2026 results, as investors focus on valuation and forward expectations. Revenue, EPS, and backlog all improved, but the stock’s premium multiple and earnings-day repositioning drove the selloff.
Elbit Systems is evolving from a wartime demand spike into a backlog-driven growth story, with 2025 revenue up 16% and backlog reaching $28.1B. Strong cash generation, expanding capacity, and improving margins support a constructive view despite rich trailing valuation optics.
Elbit Systems Ltd. (ESLT) climbs after-hours after posting strong Q1 2026 results and landing a $1.4 billion European military modernization contract. The defense tech company’s revenue, margins, and backlog all improved, reinforcing investor confidence in its growth outlook.