The demand for the airplane-based, anti-missile, laser system being developed by defense contractor Elbit (ESLT) is likely to be very high, and the Israel-based company may start producing the weapon within a year or two.
Meanwhile, the company delivered excellent fourth-quarter results, and its revenue from Israel, in-line with my previous predictions, jumped tremendously in 2025, while the latter trend is only likely to intensify going forward.
In light of all of these strong, positive catalysts, investors should consider buying ESLT stock.
Elbit’s Upcoming Laser Weapon Could Become a Huge Catalyst Relatively Soon
Several factors indicate that the demand for Elbit’s plane-based, laser defense system will be gigantic.
In a number of my past columns about Elbit, I’ve noted that the company was developing a laser-based, anti-missile system for airplanes, and I theorized that the offering was likely to be much more resilient to adverse weather conditions than Israel’s ground-based, laser, missile-defense weapon, known as Iron Beam.
Speaking on Elbit’s fourth-quarter earnings call, held on March 17, CEO Bezhalel Machlis provided further evidence for my assertion, stating that, “Putting a High-Power Laser in the air (will) enable us first to overcome some of the challenges of the ground like weather and dust and turbulence.”
He added that, “Flying above clouds will enable us to…(add) more range and to be more effective, and also to eliminate the threats far away from our borders.” The latter advantage, which could prevent Israelis from having to huddle in bomb shelters frequently during conflicts, would probably be a major selling point for the country.
Also noteworthy is the fact that the performance of Israel’s ground-based, missile-defense laser, Iron Beam, has reportedly been quite disappointing during the country’s current war with Iran.
And as Machlis articulated during the company’s earnings call, countries are using extremely costly missiles to shoot down Iran’s missiles and drones. Lasers, on the other hand, only cost at most $10 per shot.
As a result of all of these points, I expect the demand for Elbit’s laser to be tremendous. Corroborating my hypothesis to some extent, the CEO said, “We see currently…very (strong) demand for such (a) solution worldwide.”
Meanwhile, Machlis noted that ESLT had received a contract from Israel’s Ministry of Defense for the system. Since the country is already spending money on the product and Machlis stated that the firm had “overcome..all (the) challenges” inherent in developing the weapon, I believe that it could be ready for production within a year or two.
Excellent Q4 Results
The firm’s revenue climbed 11% versus the same period a year earlier to $2.1 billion, while its operating income soared 36% year-over-year to $192 million. Further, Elbit’s backlog jumped 24% YOY to $28.1 billion, while its book-to-bill ratio came in at an outstanding 2.4 times.
Israel Revenue Is Likely to Keep Soaring
In 2025, the firm’s revenue from Israel jumped 28.5% to $2.56 billion. While that growth radically slowed to 7% YOY last quarter, likely due to the winding down of the war against Hamas late last year, it will probably reaccelerate a great deal for three main reasons. First, the country recently raised its defense budget by $13 billion amid the war with Iran.
And as I’ve written in past columns, Israel is looking to increase the proportion of its weapons that it produces locally while weaning itself off of U.S. aid, nearly all of which has to be spent on U.S. defense offerings.
*This article is intended to be informational only; it is not financial advice.
