Elbit Systems Surpasses Check Point as Israel's Most Valuable Company on Wall Street

Elbit Systems has surpassed Check Point Software Technologies and CyberArk Software to become Israel's most valuable company on Wall Street, with a market cap of $22.5 billion. The defense electronics company's share price has risen 70% in the second half of 2024 and another 70% in 2025, driven by increased defense procurement in Europe and the ongoing war in Israel.

Elbit Systems has surged to become Israel's most valuable company on Wall Street, as its market cap reached $22.5 billion. This significant milestone comes on the heels of a remarkable share price performance, with the company's stock rising by 70% in the second half of 2024 and another 70% in 2025. The primary drivers behind this impressive growth include increased defense procurement in Europe and the ongoing conflict in Israel [1].

Elbit Systems' success can be attributed to its innovative high-power laser (HPL) technology, which has revolutionized air and missile defense. The company's strategic position as a pioneer in directed energy weapons (DEW) has been bolstered by geopolitical volatility and technological advancements. For instance, the Iron Beam, a 100-kilowatt-class laser developed in partnership with Rafael Advanced Defense Systems, has demonstrated its combat readiness by intercepting Hezbollah-launched drones at a cost of just $2.50 per shot, compared to traditional interceptor missiles that cost $50,000 [1].

The global defense landscape is undergoing a seismic shift, driven by geopolitical volatility and technological innovation. As defense budgets surge in response to conflicts in Ukraine, the Middle East, and rising tensions in Europe, Elbit's strategic position as a pioneer in DEW has never been stronger. The company's recent $260 million contract for DIRCM systems for Germany's A400M aircraft and $330 million in naval defense deals with NATO members underscore its expanding footprint [1].

Elbit Systems' Q1 2025 results highlight the company's ability to capitalize on this momentum. Revenue surged 22% year-over-year to $1.896 billion, driven by a 48% increase in land division revenue and robust international demand. The company's record backlog of $23.1 billion—up 40% from 2024—provides visibility into future cash flows, with 66% of the backlog originating from international markets. This backlog, combined with free cash flow of $161 million in Q1, reflects operational efficiency and a strong balance sheet, even as global markets face volatility [1].

Despite its premium valuation—ESLT trades at a trailing P/E of 58.86 and an EV/EBITDA of 32.92—the stock's fundamentals justify the multiple. Analysts, including BofA's Ronald Epstein, have initiated Buy ratings with price targets of $500, citing Elbit's technological leadership and expanding international contracts [1].

Key buy points for investors include:
1. Record Backlog: The $23.1 billion backlog, with 51% expected to be fulfilled in 2025 and 2026, ensures stable revenue growth.
2. Operational Efficiency: Free cash flow of $161 million in Q1 and a levered free cash flow of $380.57 million demonstrate strong liquidity.
3. Geopolitical Tailwinds: Rising defense budgets in NATO-aligned countries and Israel's own security imperatives guarantee sustained demand.
4. Technological Leadership: The Iron Beam's combat-proven success and airborne HPL advancements create a moat against competitors [1].

Elbit Systems is not merely a defense contractor—it is a technological innovator navigating a sector in flux. Its high-power laser technology addresses the most pressing security challenges of the 21st century, from drone swarms to hypersonic missiles. With geopolitical tensions ensuring elevated defense spending and a robust pipeline of contracts, ESLT is poised to deliver outsized returns. For investors seeking exposure to a sector where innovation meets necessity, Elbit Systems represents a compelling case study in strategic foresight and execution [1].

References:
[1] https://www.ainvest.com/news/elbit-systems-eslt-high-power-laser-revolution-geopolitically-charged-defense-sector-2508/