Elbit Systems (NASDAQ:ESLT – Get Free Report) and Rocket Lab (NASDAQ:RKLB – Get Free Report) are both large-cap aerospace companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, earnings, institutional ownership, profitability and dividends.
Insider and Institutional Ownership
17.9% of Elbit Systems shares are held by institutional investors. Comparatively, 71.8% of Rocket Lab shares are held by institutional investors. 0.8% of Elbit Systems shares are held by company insiders. Comparatively, 8.4% of Rocket Lab shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Earnings & Valuation
This table compares Elbit Systems and Rocket Lab”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Elbit Systems | $8.23 billion | 4.34 | $534.34 million | $12.35 | 65.04 |
| Rocket Lab | $601.80 million | 96.61 | -$198.21 million | ($0.32) | -313.94 |
Elbit Systems has higher revenue and earnings than Rocket Lab. Rocket Lab is trading at a lower price-to-earnings ratio than Elbit Systems, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a breakdown of current recommendations for Elbit Systems and Rocket Lab, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Elbit Systems | 0 | 4 | 2 | 0 | 2.33 |
| Rocket Lab | 1 | 5 | 12 | 3 | 2.81 |
Elbit Systems presently has a consensus target price of $725.25, indicating a potential downside of 9.71%. Rocket Lab has a consensus target price of $108.24, indicating a potential upside of 7.74%. Given Rocket Lab’s stronger consensus rating and higher probable upside, analysts clearly believe Rocket Lab is more favorable than Elbit Systems.
Volatility & Risk
Elbit Systems has a beta of 0.17, suggesting that its share price is 83% less volatile than the S&P 500. Comparatively, Rocket Lab has a beta of 2.54, suggesting that its share price is 154% more volatile than the S&P 500.
Profitability
This table compares Elbit Systems and Rocket Lab’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Elbit Systems | 7.14% | 16.15% | 5.25% |
| Rocket Lab | -26.87% | -11.72% | -7.82% |
Summary
Rocket Lab beats Elbit Systems on 8 of the 15 factors compared between the two stocks.
About Elbit Systems
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 operates through Aerospace, C4I and Cyber, ISTAR and EW, Land, and Elbit Systems of America segments. It also 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. In addition, the company manufactures and sells data links and radio communication systems and equipment, and cyber intelligence, autonomous, and homeland security solutions. Further, it provides various electronic warfare and signal intelligence systems, and laser systems; armored vehicle and other platforms survivability and protection systems, artillery, and mortar systems, as well as provides various training and support services. Additionally, the company offers products and systems solutions to military, homeland security, medical instrumentation, and commercial aviation clients. It markets its systems and products as a prime contractor or subcontractor to various governments and companies. It also has operations in Israel, North America, Europe, Latin America, the Asia-Pacific, and internationally. The company was incorporated in 1966 and is based in Haifa, Israel.
About Rocket Lab
Rocket Lab USA, Inc., a space company, provides launch services and space systems solutions for the space and defense industries. The company provides launch services, spacecraft design services, spacecraft components, spacecraft manufacturing, and other spacecraft and on-orbit management solutions; and constellation management services, as well as designs and manufactures small and medium-class rockets. It also designs, manufactures, and sells Electron, a reusable orbital-class small rocket; and the Photon satellite platforms, as well as developing the Neutron 8-ton payload class launch vehicle; conducts remote launch activities; and designs and manufactures a range of components and subsystems for the Photon family of spacecraft and broader merchant spacecraft components. The company serves commercial, aerospace prime contractors, and government customers. Rocket Lab USA, Inc. was founded in 2006 and is headquartered in Long Beach, California.
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