Elbit Systems Ltd. (NASDAQ: ESLT) is an Israel-based company founded in 1966. The company's headquarters reside in Haifa, Israel. The company develops and supplies land, naval, and airborne products and systems for applications in the defense and commercial aviation industries. Elbit Systems has influence throughout the world and continues today as the largest non-government-owned defense company in Israel. The company has been awarded the Israeli Defense Prize ten times, recognizing extraordinary contributions to defense technological innovations. The company is currently trading at $94.75.
Elbit Systems Ltd. has been experiencing a positive trend in revenue growth, outpacing the industry average of 1.7%. When you compare this year's numbers to last year's, you see that Elbit's revenue growth increased by 5.8%. That may only be a small increase, but it shows that Elbit Systems is making considerably bigger leaps than their competition when it comes to increases in their bottom line. In addition, the increase in the company's revenue appears to have helped boost the earnings per share.
Over the past year, Elbit has seen its net income increase 42% causing the stock to surge by 47% over the past year. In that same period, the stock outperformed the rise in the S&P Index. In addition, Elbit has seen a large infusion of cash flow increasing net operating cash flow by 972%. The company's stock boasts a beta of .57. This translates that the stock will be less volatile than the market making the company a safer investment than other companies.
Elbit Systems Ltd. faces a huge opportunity to continue to grow in the future. 2016 is expected to be a big year for the firm as the European defense market recovers and the Asia-Pacific market continues to remain strong. Elbit won several important defense contracts in Europe in 2015, which is expected to increase revenue for years to come. In February, Elbit won a contract from the UK Defense Ministry's Military Fight Training Program worth about 500 million pounds.
Along with those agreements, the market for defense spending in India and Australia is growing sharply, opening up even more opportunity for the company to expand. However, Elbit had a backlog of $8.6 billion, up from years past. This can be viewed as a negative because there is opportunity for sales that are not being fulfilled. The company on the other hand, is positive it can transform the billions in backlog into profits and revenue in the near future.
In conclusion, Elbit Systems Ltd. has been an industry leader in the defense and aviation industry for years, yet still boasts the promise of more growth that you might see from smaller companies. Elbit is currently trading at a high rate but with future contracts in place and the growing concern for safety spread worldwide, Elbit would be a smart investment. With the acts of terrorism across the world and the migration crisis in Europe, there are big opportunities for Elbit in Europe to add more contracts and continue to add to their impressive track record. Sadly, there may never be an answer to these terrible acts of terrorism we have seen, but security fears, means increased defense spending, which means more opportunities for Elbit Systems Ltd. in the future.
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