Key Takeaways AeroVironment signed an MOU with NIOA to explore local production of one-way attack systems.The partnership could enable local manufacturing, maintenance, distribution and Australian variants.The companies may establish an Australian center of excellence, subject to approvals and final agreements.
AeroVironment (AVAV - Free Report) signed a memorandum of understanding (MOU) with NIOA Australia on Oct. 13, 2026, to explore opportunities for increased Australian industry participation in the production and support of its one-way attack systems. Announced during LAND FORCES 2026, the agreement establishes a framework for potential localization, co-production and sustainment of these systems in Australia.
The partnership brings together AeroVironment’s expertise in autonomous systems and NIOA’s experience in weapons and munitions. Potential areas of cooperation include local manufacturing and integration, in-country maintenance and support, and the development of Australian variants featuring NIOA-developed payloads and warheads where technically, commercially and legally feasible. These efforts could help AeroVironment better align its offerings with local defense requirements while enhancing support capabilities for Australian and allied customers.
How AeroVironment Could Benefit From the NIOA PartnershipThe agreement also provides for NIOA to serve as an Australian distributor and authorized support partner for AeroVironment’s one-way attack systems, subject to final agreements and required approvals. Potential responsibilities include customer engagement, training, logistics, inventory management and maintenance coordination. Establishing local support capabilities could improve customer access and sustainment while creating a foundation for future regional business.
The companies also intend to explore opportunities to establish Australia as a regional center of excellence for advanced launched effects and loitering munitions. Such a development could provide a platform for future manufacturing, integration and capability development for Australian and allied customers. However, the MOU is non-binding, and any technology transfer, manufacturing or distribution arrangements remain subject to applicable U.S. and Australian laws, government approvals and definitive agreements.
AeroVironment’s agreement with NIOA marks a potential step toward broadening its manufacturing and support presence in Australia. Local production and sustainment could strengthen relationships with allied defense customers, improve regional support capabilities and create additional commercial opportunities if the proposed arrangements advance.
Defense Drone Makers Expand Autonomous Warfare CapabilitiesAeroVironment develops unmanned aircraft systems, loitering munitions and precision-strike technologies for defense customers. Its agreement with NIOA Australia explores opportunities to localize production, co-produce one-way attack systems and establish local sustainment capabilities. Other tickers benefiting from the same trend are discussed below:
Kratos Defense & Security Solutions (KTOS - Free Report) : Kratos develops unmanned aerial systems and tactical drone platforms, including affordable systems designed for military applications. Its focus on scalable unmanned technologies aligns with the broader defense trend toward expanding autonomous capabilities and fielding cost-effective aerial systems.
As governments seek to strengthen drone production capacity and operational readiness, Kratos could benefit from increased demand for unmanned platforms. Its manufacturing capabilities and defense relationships provide exposure to this trend, although its products differ from AVAV’s one-way attack systems and any growth depends on contract awards and execution.
Elbit Systems (ESLT - Free Report) : Elbit Systems develops unmanned aircraft, autonomous technologies and loitering munitions, including its SkyStriker system. Its portfolio positions the company well as defense forces increasingly integrate unmanned strike capabilities into their operations.
Elbit’s international defense partnerships and loitering-munition offerings align with the broader trend toward strengthening local defense capabilities and expanding access to autonomous weapons.
Red Cat Holdings (RCAT - Free Report) : Red Cat develops unmanned aerial systems for military and government applications, with a focus on tactical drones and reconnaissance capabilities. While RCAT’s portfolio is not a direct substitute for AVAV’s one-way attack drones, both companies operate within the growing military unmanned-systems market.
Rising defense interest in deployable drone fleets and reliable supply chains could create opportunities for Red Cat as governments expand their unmanned capabilities. The company stands to benefit from the broader adoption of military drones.
Red Cat Holdings is chasing an Austrian engine maker with a cash offer that could reshape how its drones and uncrewed boats are powered, and the move is drawing far more investor attention than anything rivals AeroVironment or Kratos put…
A cash offer for Austrian engine maker Steyr Motors is sending shares of Red Cat Holdings (NASDAQ:RCAT) sharply higher as the drone maker moves further into propulsion. Red Cat stock is at $5.10, up 8%, after the company announced the proposal.
Meanwhile, AeroVironment (NASDAQ:AVAV | AVAV Price Prediction) shares are up 1%, a far smaller gain than Red Cat stock. Kratos Defense & Security Solutions (NASDAQ:KTOS) stock is at $40.72, up 0.7%, also trailing Red Cat stock.
For a sector-level check, the Defiance Drone and Modern Warfare ETF (NYSEARCA:JEDI) is up 7%, rising nearly as much as Red Cat stock. At the same time, the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is up 0.6%, representing a calmer move for the broad market.
Steyr Motors Offer Targets Blue Ops Propulsion
Red Cat announced a proposed voluntary public purchase offer to acquire all outstanding shares of Steyr Motors in cash. B&C Group, Steyr Motors’ anchor shareholder, has irrevocably committed to tender its shares.
The maritime push at Red Cat is already gaining traction. Blue Ops ramped to full-rate production of the Variant 7 uncrewed surface vessel. The U.S. Navy contracted with Red Cat for a Variant 7 lease and testing under the Office of Naval Research. An in-house engine supplier could expand Red Cat’s propulsion stack for both the Variant 7 and its Black Widow drone.
Small military drones and uncrewed boats form Red Cat’s core business, sold to the Army, Air Force, Navy, and Marine Corps. Chief Executive Jeff Thompson has stressed building an “all-domain autonomy platform” covering air, land, and sea.
Cash Reserve Backs Red Cat’s Expansion
A deep cash reserve backs Red Cat as it enters the Steyr Motors process. The company finished Q2 FY2026 with $325.55 million in cash, a ample reserve against its $720.8 million market capitalization.
Red Cat’s growth story carries its own execution risk. Its Q2 revenue reached $20.19 million, up 527% from a year earlier, yet it missed the $22.58 million consensus.
On the bottom line, Red Cat posted a GAAP loss of $0.26 per share, wider than the $0.17 loss analysts expected. Full-year guidance at Red Cat held steady, as the company reaffirmed its fiscal 2026 revenue target of $150 million to $180 million.
Drone ETF Keeps Pace as AeroVironment and Kratos Lag
The Defiance Drone and Modern Warfare ETF’s rally stands apart from the muted gains in AeroVironment and Kratos shares. Red Cat made up 4.6% of the fund’s net assets as of June 30, with AeroVironment at 3% and Kratos at 1.3%.
AeroVironment builds military drones and loitering munitions, with systems including Switchblade, Puma, and the P550, and Kratos builds jet-powered combat drones such as the Valkyrie, plus propulsion for unmanned aircraft and missiles. Engine output is a priority there too, with Kratos planning to ramp jet engine production to 3,000 units in 2027.
Demand across Red Cat, AeroVironment, and Kratos ties back to the same procurement wave, as the U.S. Department of War prioritizes affordable, mass-producible unmanned systems. Specifically, Red Cat mentions the Drone Dominance program for low-cost attributable drones as a tailwind.
Steyr Motors Offer Hinges on Shareholder Acceptance
The open variable for Red Cat is whether Steyr Motors holders tender enough shares to clear the offer’s minimum acceptance threshold. Regulatory approvals are also required, and Red Cat stated the offer may not close.
The bulls can point to a deeper propulsion stack and ample cash, while the bears could observe Red Cat’s revenue and earnings misses. Investors may want to keep their positions modest until more Steyr Motors holders follow B&C Group in offering.
Contact [email protected] for any questions or corrections.
Wall Street watches a company's quarterly report closely to understand as much as possible about its recent performance and what to expect going forward. Of course, one figure often stands out among the rest: earnings.
The earnings figure itself is key, of course, but a beat or miss on the bottom line can sometimes be just as, if not more, important. Therefore, investors should consider paying close attention to these earnings surprises, as a big beat can help a stock climb and vice versa.
Now that we know how important earnings and earnings surprises are, it's time to show investors how to take advantage of these events to boost their returns by utilizing the Zacks Earnings ESP filter.
The Zacks Earnings ESP, ExplainedThe Zacks Expected Surprise Prediction, or ESP, works by locking in on the most up-to-date analyst earnings revisions because they can be more accurate than estimates from weeks or even months before the actual release date. The thinking is pretty straightforward: analysts who provide earnings estimates closer to the report are likely to have more information.
The core of the ESP model is comparing the Most Accurate Estimate to the Zacks Consensus Estimate, where the resulting percentage difference between the two equals the Expected Surprise Prediction. The Zacks Rank is also factored into the ESP metric to better help find companies that appear poised to top their next bottom-line consensus estimate, which will hopefully help lift the stock price.
Bringing together a positive earnings ESP alongside a Zacks Rank #3 (Hold) or better has helped stocks report a positive earnings surprise 70% of the time. Furthermore, by using these parameters, investors have seen 28.3% annual returns on average, according to our 10 year backtest.
Stocks with a #3 (Hold) ranking, which is most stocks covered at 60%, are expected to perform in-line with the broader market. But stocks that fall into the #2 (Buy) and #1 (Strong Buy) ranking, or the top 15% and top 5% of stocks, respectively, should outperform the market. Strong Buy stocks should outperform more than any other rank.
Should You Consider General Dynamics?The final step today is to look at a stock that meets our ESP qualifications. General Dynamics (GD - Free Report) earns a #3 (Hold) 14 days from its next quarterly earnings release on October 30, 2026, and its Most Accurate Estimate comes in at $4.24 a share.
By taking the percentage difference between the $4.24 Most Accurate Estimate and the $4.14 Zacks Consensus Estimate, General Dynamics has an Earnings ESP of +2.36%. Investors should also know that GD is one of a large group of stocks with positive ESPs. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
GD is part of a big group of Aerospace stocks that boast a positive ESP, and investors may want to take a look at AeroVironment (AVAV - Free Report) as well.
Slated to report earnings on December 8, 2026, AeroVironment holds a #3 (Hold) ranking on the Zacks Rank, and its Most Accurate Estimate is $0.50 a share 53 days from its next quarterly update.
For AeroVironment, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.37 is +35.75%.
Because both stocks hold a positive Earnings ESP, GD and AVAV could potentially post earnings beats in their next reports.
Find Stocks to Buy or Sell Before They're ReportedUse the Zacks Earnings ESP Filter to turn up stocks with the highest probability of positively, or negatively, surprising to buy or sell before they're reported for profitable earnings season trading. Check it out here >>
Analyst’s Disclosure: I/we have a beneficial long position in the shares of AVAV either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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AeroVironment (AVAV - Free Report) ended the recent trading session at $120.60, demonstrating a -5.14% change from the preceding day's closing price. This change lagged the S&P 500's daily loss of 1.11%. Elsewhere, the Dow saw a downswing of 0.09%, while the tech-heavy Nasdaq depreciated by 1.88%.
Shares of the maker of unmanned aircrafts witnessed a loss of 19.02% over the previous month, trailing the performance of the Aerospace sector with its loss of 7.8%, and the S&P 500's gain of 2.06%.
Market participants will be closely following the financial results of AeroVironment in its upcoming release. The company is forecasted to report an EPS of $0.37, showcasing a 15.91% downward movement from the corresponding quarter of the prior year. Alongside, our most recent consensus estimate is anticipating revenue of $508.79 million, indicating a 7.68% upward movement from the same quarter last year.
For the full year, the Zacks Consensus Estimates project earnings of $3.26 per share and a revenue of $2.21 billion, demonstrating changes of -1.51% and +11.71%, respectively, from the preceding year.
Investors should also pay attention to any latest changes in analyst estimates for AeroVironment. Recent revisions tend to reflect the latest near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.37% higher within the past month. AeroVironment presently features a Zacks Rank of #3 (Hold).
Investors should also note AeroVironment's current valuation metrics, including its Forward P/E ratio of 38.96. Its industry sports an average Forward P/E of 31.66, so one might conclude that AeroVironment is trading at a premium comparatively.
One should further note that AVAV currently holds a PEG ratio of 2. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. As the market closed yesterday, the Aerospace - Defense Equipment industry was having an average PEG ratio of 2.04.
The Aerospace - Defense Equipment industry is part of the Aerospace sector. Currently, this industry holds a Zacks Industry Rank of 38, positioning it in the top 16% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
ARLINGTON, Va.--(BUSINESS WIRE)--AeroVironment, Inc. (“AV”) (NASDAQ: AVAV), a global defense technology leader, today announced a memorandum of understanding (MOU) with Alpha Unmanned Systems S.L. to explore collaboration supporting AV's JUMP 20 fixed-wing unmanned aircraft system (UAS), which features vertical takeoff and landing (VTOL) capabilities. The announcement is being made in connection with the Association of the United States Army (AUSA) Annual Meeting & Exposition in Washington.“.
ARLINGTON, Va.--(BUSINESS WIRE)---- $AVAV #AVAV--AeroVironment, Inc. (“AV”) (NASDAQ: AVAV), a global defense technology leader, and Thunder Tiger Corp., a Taiwan-based developer and manufacturer of unmanned systems, today announced a memorandum of understanding to explore collaboration on uncrewed systems integration, potential unmanned aircraft systems (UAS) localization and co-production and future capability co-development in Taiwan. The agreement establishes a framework for evaluating multiple areas of coo.
ARLINGTON, Va.--(BUSINESS WIRE)--AeroVironment, Inc. (“AV”) (NASDAQ: AVAV), and Elsight (ASX: ELS) announced a partnership to integrate Elsight's Halo connectivity technology into AV's Mayhem™ 10 launched effects system, strengthening communications resilience in complex and contested environments. The integration will enable Mayhem 10 to intelligently manage multiple communications networks, including satellite, private and public cellular and point-to-point radio, through a single connectivit.
Companies to explore Australian production, integration, sustainment and support for AV’s one-way attack systems.
PERTH, Australia--(BUSINESS WIRE)--AeroVironment, Inc. (“AV”) (NASDAQ: AVAV) and NIOA Australia have signed a memorandum of understanding (MOU) to explore opportunities to expand Australian industry participation supporting AV’s one-way attack systems.
Signed during LAND FORCES 2026, the agreement establishes a framework for AV and NIOA to identify and facilitate a path forward for the localization, co-production and sustainment of AV’s one-way attack systems in Australia.
Under the MOU, the companies will explore opportunities to combine AV’s autonomous systems with NIOA’s sovereign weapons and munitions expertise. Potential areas of cooperation include local manufacturing and integration, in-country support and sustainment, and the development of Australian variants incorporating NIOA-developed payloads, warheads and mission effects where technically, commercially and legally feasible.
“AV’s one-way attack systems are proven capabilities with growing demand from U.S. allies and partners around the world,” said Wahid Nawabi, chairman, president and chief executive officer of AeroVironment. “Our collaboration with NIOA creates a pathway to expand that capability in Australia and explore how Australian industry can contribute to the manufacture, integration, support and sustainment of AV’s one-way attack systems.”
The MOU also contemplates NIOA serving, subject to final agreements and required approvals, as an Australian distributor and authorized support partner for AV's one-way attack systems. The companies plan to evaluate opportunities for NIOA to support Australian customer engagement, training, logistics, maintenance coordination, inventory management and other in-country sustainment activities.
The parties also share a non-binding ambition to explore the establishment of Australia as a regional center of excellence for advanced launched effects and loitering munitions, combining AV’s autonomous systems with NIOA’s sovereign weapons and munitions expertise. The MOU contemplates potential local manufacture, integration, sustainment and future capability development for Australian and allied customers, subject to applicable laws, approvals and subsequent agreements.
The MOU is non-binding, and any future technology transfer, manufacturing, distribution or other commercial activities will be subject to applicable U.S. and Australian laws and regulations, required government approvals and separate definitive agreements between AV and NIOA.
About AV
AeroVironment (“AV”) (NASDAQ: AVAV) is a defense technology leader delivering integrated capabilities across air, land, sea, space, and cyber. The Company develops and deploys autonomous systems, loitering munitions, counter-UAS technologies, space-based platforms, directed energy systems, and cyber and electronic warfare capabilities—built to meet the mission needs of today’s warfighter and tomorrow’s conflicts. With a national manufacturing footprint and a deep innovation pipeline, AV delivers proven systems and future-defining capabilities at speed, scale, and operational relevance. For more information, visit www.avinc.com.
About NIOA
NIOA is a privately-owned global munitions company established in Queensland, Australia, in 1973. Its operations include NIOA Australia, NIOA New Zealand, the Australian Missile Corporation, Barrett Firearms in the United States, NIOA United Kingdom and joint venture Rheinmetall NIOA Munitions. NIOA is a major tenant at the Australian Government-owned munitions facility at Benalla, Victoria, and a joint venture partner in the Rheinmetall NIOA Munitions artillery shell forging plant at Maryborough, Queensland.
Safe Harbor Statement
Certain statements in this press release may constitute “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations, forecasts, and assumptions that involve risks and uncertainties, which could cause actual results to differ materially. Factors that may cause such differences include, but are not limited to, our ability to perform under existing contracts and obtain new ones; regulatory changes; competitor activities; market growth; product development challenges; and general economic conditions. For a more detailed discussion of these risks, please refer to AeroVironment’s filings with the Securities and Exchange Commission. We undertake no obligation to update forward-looking statements as a result of new information or future events.
AeroVironment, Inc. (NASDAQ:AVAV – Get Free Report)’s stock price reached a new 52-week low during mid-day trading on Tuesday. The stock traded as low as $131.50 and last traded at $131.51, with a volume of 1,769,207 shares trading hands. The stock had previously closed at $137.11.
Wall Street Analysts Forecast Growth
Several research analysts have recently commented on AVAV shares. Weiss Ratings downgraded AeroVironment from a “sell (d)” rating to a “sell (d-)” rating in a research note on Friday, September 18th. Royal Bank Of Canada lowered AeroVironment from an “outperform” rating to a “sector perform” rating and decreased their target price for the stock from $210.00 to $180.00 in a report on Thursday, July 9th. Rothschild & Co Redburn assumed coverage on shares of AeroVironment in a research report on Tuesday, October 6th. They issued a “neutral” rating and a $165.00 price objective on the stock. Piper Sandler cut their target price on shares of AeroVironment from $248.00 to $235.00 and set an “overweight” rating for the company in a research note on Thursday, July 9th. Finally, Raymond James Financial raised shares of AeroVironment from a “market perform” rating to an “outperform” rating and set a $210.00 target price for the company in a report on Thursday, July 16th. Two analysts have rated the stock with a Strong Buy rating, eighteen have issued a Buy rating, five have given a Hold rating and one has given a Sell rating to the stock. According to MarketBeat.com, AeroVironment has a consensus rating of “Moderate Buy” and a consensus price target of $228.80.
Get Our Latest Report on AVAV
AeroVironment Stock Performance
The stock’s 50-day simple moving average is $156.40 and its 200-day simple moving average is $167.18. The stock has a market cap of $6.68 billion, a price-to-earnings ratio of -56.20, a price-to-earnings-growth ratio of 2.16 and a beta of 1.36. The company has a current ratio of 4.26, a quick ratio of 3.33 and a debt-to-equity ratio of 0.17.
AeroVironment (NASDAQ:AVAV – Get Free Report) last released its earnings results on Wednesday, September 9th. The aerospace company reported $0.59 earnings per share for the quarter, beating analysts’ consensus estimates of $0.22 by $0.37. AeroVironment had a positive return on equity of 4.04% and a negative net margin of 5.77%. The firm had revenue of $480.49 million during the quarter, compared to the consensus estimate of $451.95 million. During the same period in the prior year, the company posted $0.32 EPS. The company’s revenue was up 5.7% compared to the same quarter last year. AeroVironment has set its FY 2027 guidance at 3.020-3.340 EPS. Analysts forecast that AeroVironment, Inc. will post 3.25 earnings per share for the current fiscal year.
Insiders Place Their Bets
In other news, Director Stephen Page sold 250 shares of the business’s stock in a transaction on Tuesday, September 15th. The stock was sold at an average price of $152.27, for a total transaction of $38,067.50. Following the completion of the transaction, the director owned 48,253 shares of the company’s stock, valued at approximately $7,347,484.31. The trade was a 0.52% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CAO Brian Shackley sold 205 shares of the business’s stock in a transaction on Friday, August 14th. The stock was sold at an average price of $201.86, for a total value of $41,381.30. Following the transaction, the chief accounting officer directly owned 7,888 shares of the company’s stock, valued at $1,592,271.68. This trade represents a 2.53% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last ninety days, insiders sold 805 shares of company stock worth $142,671. Company insiders own 0.79% of the company’s stock.
Institutional Inflows and Outflows
Institutional investors have recently bought and sold shares of the business. GK Wealth Management LLC bought a new position in AeroVironment in the 3rd quarter valued at approximately $49,000. WoodTrust Financial Corp grew its stake in shares of AeroVironment by 58.9% during the third quarter. WoodTrust Financial Corp now owns 2,780 shares of the aerospace company’s stock worth $395,000 after buying an additional 1,030 shares during the last quarter. GAMMA Investing LLC grew its stake in shares of AeroVironment by 52.5% during the third quarter. GAMMA Investing LLC now owns 1,075 shares of the aerospace company’s stock worth $153,000 after buying an additional 370 shares during the last quarter. CoreCap Advisors LLC grew its stake in shares of AeroVironment by 82.1% during the third quarter. CoreCap Advisors LLC now owns 652 shares of the aerospace company’s stock worth $93,000 after buying an additional 294 shares during the last quarter. Finally, Vista Investment Partners LLC increased its holdings in shares of AeroVironment by 0.9% during the third quarter. Vista Investment Partners LLC now owns 16,594 shares of the aerospace company’s stock worth $2,360,000 after buying an additional 143 shares in the last quarter. Institutional investors and hedge funds own 86.38% of the company’s stock.
About AeroVironment
(Get Free Report)
AeroVironment, Inc is a defense technology company that develops and supplies autonomous systems, uncrewed aircraft, loitering munitions and counter-uncrewed-aircraft systems. Its portfolio includes small unmanned aircraft systems such as Raven, Puma and Wasp, as well as larger platforms including JUMP 20 and Quantix Recon.
The company is also known for its Switchblade family of loitering munitions, which combine surveillance, target identification and precision strike capabilities. AeroVironment provides related ground control systems, sensors, software, communications equipment, training and support services for intelligence, surveillance and reconnaissance missions.
Founded in 1971 by aerospace engineer Paul B.
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Key Takeaways AeroVironment's VideoRay joins an AEVEX-led team selected for a Navy mine-countermeasure prototype.VideoRay demonstrated autonomous underwater operations launched from an uncrewed surface vessel.VideoRay builds on a $92.6 million Navy contract awarded in 2024 for production and development.
AeroVironment (AVAV - Free Report) is expanding its presence in naval defense applications, with its wholly owned subsidiary VideoRay selected to support a team participating in a U.S. Navy mine-countermeasure modernization effort.
On Oct. 8, 2026, AeroVironment announced that VideoRay was supporting an AEVEX-led team selected for a prototype Other Transaction Agreement following the U.S. Navy and Department of War Innovation Unit’s Mine Countermeasure Modernization Prize Challenge. BlackSea Technologies, now part of AEVEX Maritime Systems, was one of three companies to receive challenge prizes after successfully completing demonstrations.
During competitive in-water testing, VideoRay demonstrated an autonomous mine-countermeasure remotely operated vehicle launched from an AEVEX uncrewed surface vessel. The integrated system used autonomous launch-and-recovery capabilities, allowing operators to conduct missions beyond the horizon from a remote ground control station. The demonstration included vessel transit, station keeping, underwater target investigation, simulated mine neutralization and post-engagement assessment.
VideoRay’s Mission Specialist Defender is a modular underwater robotic platform designed to accommodate different sensors, manipulators and specialized payloads. Its open architecture allows the system to integrate with different surface vessels and mission equipment, potentially supporting a range of underwater intervention and mine-countermeasure requirements.
The development also builds on VideoRay’s existing relationship with the U.S. Navy. In 2024, the company received a five-year contract valued at $92.6 million for continued production, sustainment and development of the Defender platform. The Navy had previously selected the system as the base platform for its MK20 Defender remotely operated vehicle supporting the Maritime Expeditionary Standoff Response program.
Further adoption of these technologies could support demand for underwater robotic platforms, integration services and long-term sustainment.
Defense Companies Gain From Autonomous Maritime ModernizationNaval forces are increasingly exploring uncrewed systems to further improve operational flexibility, reduce personnel exposure and strengthen capabilities in complex maritime environments. Other companies with exposure to the broader defense modernization market include:
Huntington Ingalls Industries (HII - Free Report) is a major U.S. military shipbuilder that provides naval platforms and related services. Its position in the naval defense sector makes it relevant to broader investment in maritime capabilities.
Northrop Grumman (NOC - Free Report) develops advanced defense technologies, including autonomous systems, sensors and mission solutions. Its portfolio reflects the wider industry focus on integrating advanced technologies into military operations.
AVAV Stock’s Earnings EstimatesThe Zacks Consensus Estimate for fiscal 2027 earnings per share implies a decrease of 1.81% year over year.
Image Source: Zacks Investment Research
AVAV Stock Trades at a DiscountIn terms of valuation, AVAV’s forward 12-month price-to-sales (P/S) is 2.96X, a discount to the industry’s average of 6.92X.
Image Source: Zacks Investment Research
AVAV Stock’s Price PerformanceIn the past three months, the company’s shares have lost 3.3% compared with the industry’s 14.6% decline.
Image Source: Zacks Investment Research
AVAV’s Zacks RankThe company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Key Takeaways Ondas secured over $165M in new orders, bringing total orders since June 30 to more than $270M.ONDS' latest wins include ULTRA, IonStrike and a $56M ESAD award for a European loitering munition program.Ondas raised its 2026 revenue target to $525M-$550M, backed by a pro forma backlog of $757M at June-end. Ondas Inc. (ONDS - Free Report) recently announced that it has secured more than $165 million in aggregate orders from the second half of August through Oct. 1. This, when combined with roughly $105 million of orders disclosed on the last earnings call (Aug. 13), brings total orders to more than $270 million since June 30, improving revenue visibility into 2027.
Management noted that broad-based strength across product categories and geographies contributed to strong order activity. Importantly, the latest wins include strategically significant orders for ULTRA and IonStrike, with both platforms progressing through key customer-validation milestones. ONDS acquired ULTRA through the DZYNE buyout. ULTRA is a long-endurance autonomous aircraft delivering multi-day ISR, while IonStrike targets the growing counter-UAS market, including defense against Shahed-class drones.
The orders also include the recent $56 million Electronic Safe & Arm Devices ("ESAD") award, supporting a European loitering munition program. The order represents an important early commercial development following Ondas’ acquisition of GATE Technologies and Bron Technologies last month.
In September, Ondas launched Dronebuster REACH, extending its non-kinetic counter-UAS capabilities, while Cyberhawk secured a multi-year infrastructure inspection agreement with SSE.
In September, Ondas also acquired three defense technology businesses (Insignito, Ottopia Defense and Caribou Labs) for $56 million, payable in cash or its common stock, with potential performance-based earn-outs of up to $32 million based upon achieving key performance milestones through 2028. In August, it entered into a definitive agreement to acquire Aran Defense Ltd., the defense division of Aran Ltd., for approximately $33 million in cash or common stock. Aran Defense would expand Ondas’ Israeli engineering and manufacturing capacity, including roughly 4,400 square meters of facilities.
These developments build on a strong second-quarter foundation. Ondas generated quarterly revenues of $83.8 million, while pro forma backlog stood at approximately $757 million at June-end, including DZYNE and Cyberhawk. Management also raised its 2026 revenue target to $525-$550 million.
With new orders continuing to boost backlog, Ondas appears to be gaining greater visibility. However, converting the rapidly expanding order book into timely deliveries, while scaling manufacturing and managing operating expenses, will remain key to sustaining its growth trajectory. Increasing competition in the already crowded drone space is another headwind.
Mapping Competitive TerrainRed Cat Holdings (RCAT - Free Report) is one of Ondas’ closest competitors. Management reaffirmed its $150-$180 million full-year revenue target at the second-quarter 2026 earnings call. Second-quarter revenues surged 527% year over year to $20.2 million. First-half 2026 revenues reached roughly $35.7 million, up from $4.8 million a year earlier.
Management said it entered the second half with nine active products, roughly 270,000 square feet of production capacity, and improved unit economics. This creates a substantially larger operating base from which second-half growth can build.
On the last earnings call, the company indicated that $50-$80 million of sellable drones could ship immediately if corresponding orders were received, primarily Black Widow and Hellcat units. The company is also broadening its reach into the maritime sector through Blue Ops, where it is developing uncrewed surface vessels.
AeroVironment (AVAV - Free Report) began fiscal 2027 on a strong note. Fiscal first-quarter revenues of $480.5 million were up 6% year over year. The company secured $683 million in bookings during the quarter, with a book-to-bill ratio of 1.4 and trailing 12-month bookings surpassed $3 billion, with a book-to-bill ratio of 1.5. Funded backlog reached $1.5 billion at quarter-end, up 37% year over year, while total funded and unfunded backlog stood at more than $2.8 billion.
The Autonomous Systems segment remains the company's principal growth engine. The segment delivered 21% year-over-year revenue growth, with Uncrewed Aircraft Systems revenues up 71%, driven by strong domestic and international demand for P550, JUMP 20-X and Puma.
AeroVironment reaffirmed fiscal 2027 revenues of $2.125-$2.225 billion, representing approximately 10% growth at the midpoint.
ONDS’ Price Performance, Valuation and EstimatesONDS’ shares have lost 1.3% in the past month against the Wireless-National industry’s growth of 11.9%
Image Source: Zacks Investment Research
The stock is trading at a 12-month forward price/sales ratio of 4.51X, considerably lower than the industry’s multiple of 8.49X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for ONDS’ earnings for the current year has been revised downward over the past 60 days.
Image Source: Zacks Investment Research
ONDS currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Key Takeaways AVAV delivered $480.5 million in revenues, while Autonomous Systems revenues jumped 21% to $346 million.Record funded backlog of $1.5 billion and $683 million in bookings provide stronger future revenue visibility.New contracts for P550 and Switchblade 600 highlight continued demand for autonomous defense technologies. AeroVironment’s (AVAV - Free Report) fiscal 2027 is off to a strong start, supported by record first-quarter revenues and a funded backlog. The company is seeing particularly strong momentum in its Autonomous Systems (AxS) segment, highlighting the growing importance of unmanned and autonomous capabilities in modern defense operations. AeroVironment generated $480.5 million in first-quarter revenues, up 6% year over year, while AxS revenues increased 21% to $346 million.
The company recorded $683 million in bookings, resulting in a 1.4 book-to-bill ratio. Funded backlog reached a record $1.5 billion, up 37% year over year, providing greater visibility into future revenues.
A key advantage for AeroVironment is its expanding portfolio of autonomous and unmanned defense technologies. The company develops systems spanning autonomous aircraft, precision strike, counter-UAS and directed-energy capabilities, allowing it to address multiple requirements across the modern battlefield. During the fiscal first quarter, the U.S. Army awarded AeroVironment a $117 million contract for its P550 system under the Long-Range Reconnaissance program. The company also received a $51 million Switchblade 600 order supporting the Army’s Lethal Unmanned Systems IDIQ. These awards demonstrate continued demand for AVAV’s autonomous and precision-strike technologies.
The company is also broadening its position across defense technology. Beyond autonomous systems, AeroVironment develops precision-strike, counter-UAS, space, directed-energy and cyber capabilities. This diversified portfolio could help AVAV capture a wider range of defense modernization opportunities as governments prioritize technologies designed for increasingly autonomous and contested battlefields.
Other Defense Stocks Benefiting From Autonomous SystemsAlong with AeroVironment, other companies are also positioned to benefit from growing defense demand for autonomous and unmanned systems, as discussed below:
Red Cat Holdings (RCAT - Free Report) is gaining exposure to the autonomous-drone trend through its defense and national-security drone portfolio. Its acquisition of Apium Swarm Robotics has expanded its capabilities in autonomous swarming technology.
Kratos Defense & Security Solutions (KTOS - Free Report) also offers exposure through its unmanned-systems business, alongside broader defense technologies spanning space, electronics and other mission-critical applications.
AVAV Stock’s Earnings EstimatesThe Zacks Consensus Estimate for fiscal 2027 earnings per share implies a decrease of 1.8% year over year.
Image Source: Zacks Investment Research
AVAV Stock Trades at a DiscountIn terms of valuation, AVAV’s forward 12-month price-to-sales (P/S) is 3X, a discount to the industry’s average of 7.1X.
Image Source: Zacks Investment Research
AVAV Stock’s Price PerformanceIn the past three months, the company’s shares have lost 6.4% compared with the industry’s 16.2% decline.
On October 06, 2026, AeroVironment Inc AVAV shares rose by 3.0%, with the stock currently priced at $143.54. This price remains well below its 52-week range of $135.20 to $417.86, reflecting significant volatility over the past year.
GF Value™ verdict: Current price of $143.54 is 44.0% below the GF Value™ estimate of $256.29.GF Score™: 79/100, indicating an above-average rating for the company.Most notable signal: Insiders sold $3.2 million worth of shares over the past 12 months, with no buying activity reported.Is AVAV Overvalued or Undervalued?AeroVironment Inc AVAV appears significantly undervalued according to the GF Value™, which estimates the fair value of the stock at $256.29. The current trading price of $143.54 presents a margin of safety of approximately 44.0%. However, it is critical to approach this GF Value™ estimate with caution as it may not provide a precise fair-value target for a company that is currently unprofitable and cash-flow-negative. GF Value™ is a proprietary intrinsic value estimate derived from historical trading multiples, past business growth, and future performance estimates, which means its reliability can diminish for companies lacking profitability.
Given AeroVironment's status as a loss-making entity, traditional earnings-based valuation metrics like the Price-to-Earnings (P/E) ratio may not be applicable. Instead, a Price-to-Sales (P/S) analysis becomes more relevant. The historical median P/S for AVAV is approximately 5.0x, which sets a different context for evaluating the current valuation and the potential upside from the current price.
How Does AVAV's Valuation Compare to Its History?MetricCurrentHistoricalP/E (TTM)N/A107.1xForward P/E43.8xN/AAs AeroVironment Inc does not currently generate profits, the traditional P/E analysis cannot be applied. The current Forward P/E of 43.8x is significantly lower than its historical median P/E of 107.1x, indicating that the stock is trading below its historical valuation. This discrepancy aligns with the GF Value™ assessment, suggesting that AVAV is undervalued based on these alternative metrics.
What Does AVAV's GF Score™ Tell Us?The GF Score™ evaluates a company's financial strength, profitability, growth, valuation, and momentum, offering a comprehensive view of its overall performance. With a GF Score™ of 79/100, AeroVironment reflects strong potential, particularly in growth and profitability, while valuation and momentum rank lower.
MetricRatingGF Score™79Financial Strength6/10Profitability7/10Growth8/10Valuation4/10Momentum4/10AeroVironment exhibits solid scores in growth (8/10) and profitability (7/10), indicating strong operational performance despite its current unprofitability. However, the lower scores in valuation (4/10) and momentum (4/10) suggest concerns regarding short-term performance and market perception, which may weigh on the stock's future trajectory.
What Are Gurus and Insiders Doing with AVAV?AeroVironment currently has 10 gurus holding its stock, with 6 adding to their positions and 3 trimming their holdings in recent quarters. This activity indicates a level of confidence among institutional investors, as more are opting to increase their stakes. However, insider activity shows a different picture, with insiders selling $3.2 million worth of shares over the past 12 months and no buying activity. This selling trend may raise concerns about the company's future prospects from the insiders' perspective, contrasting with the positive guru activity.
What This Means for InvestorsBased on the analysis conducted, AeroVironment Inc AVAV is currently undervalued according to the GF Value™ assessment, which suggests a potential investment opportunity, albeit with significant caveats due to the company's unprofitability and cash-flow challenges. Investors should consider both the positive guru sentiment and the cautionary signals from insider selling when evaluating the stock's future path. For further insights, visit the AeroVironment Inc (AVAV) stock page for detailed information.
Frequently Asked QuestionsWhat is AVAV's GF Score™?
AVAV has a GF Score™ of 79/100, indicating above-average performance and potential based on various financial metrics.
Is AVAV overvalued or undervalued?
According to the GF Value™ verdict, AVAV is undervalued, trading 44.0% below its estimated fair value of $256.29.
What is AVAV's P/E ratio?
As of now, AVAV does not have a P/E ratio due to its unprofitability; however, the Forward P/E is 43.8x, which is lower than its historical median of 107.1x.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
Disclosures I/We may personally own shares in some of the companies mentioned above. However, those positions are not material to either the company or to my/our portfolios.
Drone stocks entered 2026 with rising defense demand for autonomous systems, counter-drone protection and domestic supply chains behind them, yet the best-known names in the group have spent the year moving backward.
Bragar Eagel & Squire, P.C. Litigation Partner Brandon Walker Encourages Investors Who Suffered Losses In Aerovironment (AVAV) To Contact Him Directly To Discuss Their Options
If you are a long-term stockholder in Aerovironment and would like to discuss your legal rights, contact Bragar Eagel & Squire partners Brandon Walker or Melissa Fortunato by email at [email protected] or by telephone at (212) 355-4648.
Click here to participate in the action.
NEW YORK, Sept. 21, 2026 (GLOBE NEWSWIRE) --
What’s Happening:
Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, is investigating potential claims against Aerovironment, Inc. (NASDAQ:AVAV) on behalf of long-term stockholders following a class action complaint that was filed against Aerovironment on May 26, 2026 with a Class Period from June 25, 2025 to March 10, 2026. Our investigation concerns whether the board of directors of Aerovironment have breached their fiduciary duties to the company.
Details:
The lawsuit alleged that Defendants made false and misleading statements and/or failed to disclose material adverse facts by understating the likelihood that AeroVironment would imminently face competition from other vendors for the work it performed in connection with the Satellite Communication Augmentation Resource program and the U.S. Space Force’s ongoing efforts to modernize the Satellite Control Network.
Next Steps:
If you are a long-term stockholder of Aerovironment, have information, would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Brandon Walker or Melissa Fortunato by email at [email protected], by telephone at (212) 355-4648, or by filling out this contact form. There is no cost or obligation to you.
About Bragar Eagel & Squire, P.C.:
Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York, South Carolina, and California. The firm represents individual and institutional investors in securities,
derivative, and commercial litigation as well as individuals in consumer protection and data privacy litigation. The firm has a nationwide practice and routinely handles cases in both federal and state courts. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.
Follow us for updates on LinkedIn and Facebook, and keep up with other news by following Brandon Walker, Esq. on LinkedIn.
Established in 1971, AeroVironment (AVAV -2.10%) has evolved over the past six decades, first from a maker of experimental solar-powered aircraft, then to a specialist in small, innovative surveillance drones, and then to a major source of weaponized drones -- specifically, Switchblade loitering munitions -- for the military. And the bigger AeroVironment gets, the more new areas of the aerospace industry it's affecting.
Case in point: In May 2025, AeroVironment announced it had closed its purchase of defense company Blue Halo for $4.1 billion. For AeroVironment -- a stock worth less than $7.5 billion today -- this was a transformative deal, turning the company from a drone specialist into a self-described "global defense technology leader with integrated capabilities across air, land, sea, space, and cyber."
Image source: Getty Images.
Blue Halo makes green for AeroVironment You can see the effect of this acquisition right on the company's income statement, where AeroVironment's revenues leapt from $820 million in the year before buying Blue Halo to $2 billion in the year after. Probably $619 million of the improvement can be traced directly to Blue Halo, now part of the company's "Space, Cyber, and Directed Energy" (SCDE) division.
Not all the news was good. Profitable in 2025, AV began losing money soon after. It was unprofitable in every quarter of 2026, and in the first quarter of 2027 as well -- with SCDE in particular described as unprofitable. Analysts are hopeful, however, that things will work out well for AV. Forecasts compiled by S&P Global Market Intelligence show AV turning GAAP-profitable by the end of this year, with $0.45 per share in earnings -- then tripling that profit in 2028, doubling it in 2029, and nearly doubling it again by 2031.
If these forecasts prove accurate, AeroVironment stock, which trades at infinity-times-earnings today, could be valued as cheaply as 25x its estimated earnings in 2031.
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Blue Halo glows brightly How much of this improvement will come from Blue Halo, specifically? That remains to be seen -- just as we wait to see how quickly Blue Halo's $4.1 billion purchase price will pay AeroVironment back in the form of new revenue.
Searching through the Defense Department archives, it appears that Blue Halo has only ever been awarded four Pentagon contracts -- most of them quite small:
$10.6 million awarded in June 2021 for training services on the Stinger surface-to-air missile. $20 million in February 2026 for "next-generation models ... data integration and databasing and artificial intelligence and machine learning." Part of a $97 million January 2025 award "for the processing, behavior characterization, and performance prediction of advanced aerospace materials," divided among Blue Halo and three other companies and organizations. And most recently, $99.8 million awarded on Sept. 11, 2026, for "research and development to advance scientific knowledge and state-of-the-art technology supporting space systems." The most recent space contract jumps out as by far the largest award granted exclusively to Blue Halo, the first big win for the SCDE division since it became part of AeroVironment, and proof positive that AeroVironment is evolving into a space stock -- generating revenue in this new growth market. At just under $100 million, this space contract alone represents nearly as much as SCDE collected in revenue in the first fiscal quarter of 2027 ($134.5 million).
The upshot for investors Still, AeroVironment investors shouldn't get too excited here. According to the Pentagon announcement, the $99.8 million space systems award isn't due for completion until late 2031 -- implying the revenue from this contract will be spread over five years. That means the award will really only increase annual revenue by about $20 million.
When you further consider that SCDE's revenue isn't currently profitable for AV (SCDE's adjusted EBITDA losses were $9 million in Q1), my hunch is it's going to be a long time before this $4.1 billion acquisition even begins to pay for itself.
For nearly as long as I've been writing for The Motley Fool, the U.S. Pentagon has wanted a laser gun. As far back as 2004, I wrote about a Northrop Grumman (NOC +0.65%) project to load a chemical oxygen iodine laser onto a Boeing (BA +0.61%) 747 and use it to shoot missiles out of the sky.
Nothing ever came of that particular project.
But something might come of this next one.
Image source: Getty Images.
Mass-market laser guns are a thing now Earlier this month, defense company AeroVironment (AVAV -2.10%) -- best known as a manufacturer of military drones -- said that the U.S. Army is paying it $464.8 million to produce laser weapons under the Enduring-High Energy Laser (E-HEL) program.
Calling it a "landmark contract," the company, often referred to as AV, said that "this award represents the first-ever production contract for directed energy systems in United States history."
And it's true! Over the years, I've covered multiple contracts awarded to multiple defense contractors for laser weapons of all shapes, sizes, and acronyms: Lockheed Martin (LMT -0.88%) got the High Energy Laser Scaling Initiative (HELSI). Kratos Defense & Security (KTOS -0.42%) built the 30-kilowatt AN/SEQ-3 Laser Weapon System (LAWS). Northrop Grumman, recovering from its airborne laser fiasco, went on to win a contract to build a 150-kilowatt Laser Weapon System Demonstrator (LWSD).
Up to now, however, every laser weapons contract awarded has been for research and development, building and testing a few prototypes at a time. But AeroVironment's contract is for laser weapon production -- and that's something never before seen.
AV Chief Executive Officer Wahid Nawabi calls this "a defining moment not only for AV, but for the future of modern defense" and is promising to execute AV's contract to produce "scalable, modular, and cost-effective defense solutions," producing dozens of 30-kilowatt LOCUST X3 laser weapon systems during the next few years that are capable of taking down even half-ton Group 3 military drones.
How much does a laser gun cost? Without a firm number on the number of lasers called for in the E-HEL contract, it's hard to say precisely how much the new counter-drone laser weapon will cost -- or how much money AeroVironment might end up making on this contract. But working off the assumption that if there were even just 200 weapons on order, AV would describe its contracted output in the "hundreds," not "dozens," let's pick a number out of a hat: 144 laser weapons -- or a dozen dozen.
If that's the right number, one might calculate that a single E-HEL laser might cost as little as $3.2 million compared to the cost of firing off two $2 million Patriot missiles to make sure of bringing down a drone. More important than the system cost, though, is the operating cost of E-HEL -- which military analysts put at just $1 per shot (for the cost of the energy to take the shot). A Patriot missile has no second-use option.
At that price, I expect E-HEL to become very popular with U.S. Army accountants -- and with the Navy, Marine Corps, and Air Force as well. And I expect the AeroVironment department responsible for building E-HEL to enjoy brisk business.
How did AeroVironment win the contract? Speaking of which, AeroVironment probably deserves a round of applause for the decision to buy defense company Blue Halo for $4.1 billion last year. Now part of the drone company's new Space, Cyber, and Directed Energy (or SCDE) division, Blue Halo is almost certainly the AV division that will build the E-HEL.
Last year, SCDE contributed about $619 million to AV's roughly $2 billion in total revenue. As E-HEL production increases, expect SCDE to become an even bigger part of AV's business.
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Is AeroVironment stock a buy? That's the question that bugs me. Is AeroVironment stock a buy? Because, as optimistic as I am about the prospects for E-HEL laser weapons becoming a must-have item for the U.S. military -- especially in a time of rising threats from drones -- I'm still not convinced that this is a game changer for AeroVironment stock.
Last quarter, AV reported strong sales at its SCDE division -- $134.5 million. The division still wasn't profitable, reporting a $9 million loss based on earnings before interest, taxes, depreciation, and amortization (EBITDA). If laser weapons turn out to be higher-margin than SCDE's other products, that could change.
But if not, then this could turn out to be just another case of "great product, great company...lousy stock."
Cheap drones are reshaping the economics of warfare, but the biggest market impact may be showing up in an unexpected place: diesel prices. In this op-ed, Frank Holmes, CEO of U.S. Global Investors (NASDAQ:GROW), examines how inexpensive drones are disrupting oil infrastructure, forcing governments to rethink the economics of air defense. For investors, Holmes argues, the bigger opportunity may lie in the commodities affected by this new era of warfare.
I’ve spent my entire career in capital markets, and what I’ve learned is that stocks tell you what people hope, while commodities tell you what’s actually happening to the stuff the world runs on.
So when I say the most important number in the drone story isn’t a defense stock, I hope you’ll hear me out.
Two weeks ago, the refining margin on European gasoil, the benchmark that sets the price of diesel and heating oil across much of the world, closed at roughly $94 a barrel over Brent crude, according to Bloomberg data. That figure is normally somewhere between $12 and $18. The worst of the 2022 energy crisis, after Russia invaded Ukraine and Europe scrambled for fuel, topped out around $71.
We’re now well past that. And we’ve been past it since late March.
This didn’t happen because a cartel cut production or because a hurricane took out the Gulf Coast. It happened because cheap drones have been systematically destroying the equipment that turns crude oil into diesel fuel, and that equipment takes a great deal longer to rebuild than it takes to blow up.
Five Dollars a Shot Against a $20,000 Machine A first-person-view attack drone can be assembled for somewhere around $500 to a few thousand dollars. An Iranian-designed Shahed-136 runs in the tens of thousands. The missiles historically used to shoot those things down cost millions of dollars each.
Obviously, that’s not a sustainable exchange rate. You can’t spend $4 million to destroy a $20,000 machine and expect to be solvent at the end of the war, no matter how good your aim is.
Ukraine figured this out and now produces drones by the hundreds of thousands per month. What started as a battlefield improvisation is now the organizing problem of Western defense procurement.
The fix is to get the cost of stopping a drone down near the cost of the drone itself. That’s the entire logic behind directed energy weapons. This month, the U.S. Army awarded AeroVironment (NASDAQ:AVAV) $464.8 million to produce LOCUST high-energy laser systems. Believe it or not, the company puts the cost of an engagement at under five dollars a shot. The Army calls it the first production contract for a high-energy laser weapon in its history.
Five dollars against $20,000. That’s the exchange rate the Pentagon wants, and the scramble to get there is where the money is going.
What It Costs to Defend a Single American Base Last autumn, unidentified drones shut down airports across northern Europe. Poland scrambled NATO aircraft over its own territory. German authorities found explosives at an airport in Leipzig. Romania sent fighter jets over a natural gas platform in the Black Sea. More than a dozen NATO countries have reported airspace violations in the past two years, and not one of them triggered a formal response. Why? Each incident was calibrated specifically to sit just below the threshold that would require one.
Closer to home, the Pentagon has been working with the Department of Homeland Security (DHS) and the FAA on the authority to bring drones down over American airports. The Congressional Budget Office (CBO) has priced what protecting a single military installation would cost. The answer is roughly $74 million to install and $5 million a year to operate, which works out to about $7.4 billion for 100 sites.
The Pentagon Is Suddenly Buying More Than It Is Fixing In the fiscal 2027 request, procurement roughly doubles, from $205 billion to $413 billion, according to Bloomberg data. Research and development nearly doubles, from $179 billion to $344 billion. Operation and maintenance, the account that pays for keeping the lights on, grows about 20%.
Buying and inventing things now takes precedence over maintaining what we already have, by a huge margin.
Europe is doing the same thing. NATO has committed around $40 billion over five years, while the European Union is building a radar and sensor line along its eastern border that’s meant to be operational by 2027.
Cheap Machines Are Rewriting the Math of War Take a look at the chart below. I put together a basket of seven publicly traded names with exposure to drones and counter-drone technology. Over the past 12 months, that basket is down about 28%. Over the same stretch, the Dow Jones U.S. Aerospace and Defense Index gained roughly 10% and the S&P 500 gained nearly 18%.
The peak came in October 2025, the same week the European airport closures were dominating the news. Since then, it’s fallen about 47%.
Look at AeroVironment, which is about as close to a pure play as the public markets offer. The company just reported record funded backlog of $1.5 billion, up 37% from a year ago, with bookings running about 1.4 times revenue. That’s huge demand, yet revenue grew only 6%. The stock is down about 40% over 12 months, even as a vast majority of analysts covering it rate it a buy.
DroneShield, an Australian firm that makes detection and jamming equipment, grew revenue 74% year-over-year and swung to a meaningful operating loss doing it. Its shares are down about 46%.
Where the Money Actually Went The thesis was right. Warfare has been restructured by cheap, expendable, autonomous machines, and the West is spending enormous sums to catch up.
Where the thesis actually paid, so far, was not in the shares of the companies making the drones. It was in the price of the fuel that comes out of the refineries the drones destroyed. Diesel near $200 a barrel is a cost borne by every trucker, every farmer, every airline and every household with an oil burner in the basement.
That’s the part I’d be watching.
Frank Holmes is the CEO and Chief Investment Officer of U.S. Global Investors (NASDAQ:GROW) (U.S. Global Investors (NASDAQ:GROW)) (U.S. Global Investors (U.S. Global Investors (NASDAQ:GROW))) (U.S. Global Investors (U.S. Global Investors (U.S. Global Investors (NASDAQ:GROW)))). With over 30 years of experience, he leads the company's mutual funds, receiving recognition from Lipper and Morningstar, and ventured into the exchange-traded fund (ETF) business in 2015. Additionally, Holmes serves as executive chairman of HIVE Blockchain Technologies, the first cryptocurrency mining company to go public, mining Bitcoin, and is a renowned keynote speaker at national and international investment conferences.
The Pentagon’s Gauntlet II results are posted, and the scoreboard belongs almost entirely to private companies.
RCAT stock is moving lower. See the real-time price action here. Ten finalists were picked across two mission areas after August testing at Fort Carson, Colorado, where drones flew find-fix-finish missions at 15-kilometer stand-off ranges and inside confined spaces, some of it repeated at night and against counter-drone systems.
Perennial Autonomy topped the Deep Strike competition with 80.1 points, ahead of Hyperscale at 70.9, Neros at 69.8, Skycutter at 66.6 and Swarm Defense Technologies at 66.0.
Neros won the Close Quarters Battle with 88.1, followed by ORQA US, XTEND Reality, Vector and ModalAI. Order quantities stay blank until contract award, and the program warns awards are not guaranteed.
None of the ten leaders trade publicly, but traders can use read-throughs instead of pure plays.
Read Next
The Losers are the Tradable NamesTeal Drones Inc., the subsidiary of Red Cat Holdings, Inc. (NASDAQ:RCAT), competed in Close Quarters Battle and did not place in the top five.
Ascent Aerosystems Inc., owned by Ondas Holdings Inc. (NASDAQ:ONDS), missed in Deep Strike. Both companies remain eligible for future Gauntlets, per the program’s regulations.
Red Cat shares changed hands at $6.88, down 3.10% Friday morning and 24.4% since Aug. 25, just before Gauntlet II testing wrapped. The stock sits 63.4% below its 52-week high, with a market value of $1.05 billion.
Ondas traded at $7.30, off 1.26% on the day and 11.4% over the same stretch, valuing the company at $4.16 billion.
Red Cat’s Gauntlet I record was already thin: the company was absent from the top 11 that collected delivery orders. Ondas’ Ascent Aerosystems placed 10th in that round with 1,600 units ordered, of which 800 have been accepted.
Where the Upside HidesComponent suppliers offer the cleanest exposure to winners nobody can buy. Unusual Machines, Inc. (AMEX:UMAC) makes drone parts and counts Donald Trump Jr. as an advisor.
The Trump administration has held talks about funding both Unusual Machines and Sequoia Capital-backed Neros, with proposals involving a mix of debt and equity that could hand the government ownership stakes. Shares of UMAC traded at $23.11 on Friday, down 3.25%.
Larger defense names moved with the sector during May’s funding headlines, including Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) and AeroVironment, Inc. (NASDAQ:AVAV), which rose alongside peers in the Spring, should also be monitored this round.
Read Next
Photo: Pavlow / Shutterstock
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
SummaryAeroVironment is transforming from a tactical drone maker into a full-spectrum defense technology platform, integrating autonomy, software, and counter-UAS capabilities.Despite a $265M GAAP net loss driven by a $240.7M goodwill impairment, AVAV's organic revenue grew 26% and adjusted EBITDA reached $286.1M in FY2026.I rate AVAV a Buy, targeting $218–$225 per share, based on continued double-digit growth, margin expansion toward 17%, and successful execution of programs like LOCUST and P550.Key risks include acquisition integration, customer concentration, competition, internal controls, and valuation—execution on backlog, BlueHalo, and margins is critical to the thesis. Buena Vista Images/DigitalVision via Getty Images
Thesis: The Numbers Look Worse Than The Business AeroVironment (AVAV) has had a difficult year, and the reasons are not difficult to understand.
The company completed the largest acquisition in its history, reported a
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Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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Sequoia Financial Advisors LLC reduced its stake in AeroVironment, Inc. (NASDAQ:AVAV – Free Report) by 35.8% in the 2nd quarter, according to the company in its most recent filing with the SEC. The fund owned 5,967 shares of the aerospace company’s stock after selling 3,330 shares during the quarter. Sequoia Financial Advisors LLC’s holdings in AeroVironment were worth $985,000 at the end of the most recent reporting period.
Several other institutional investors and hedge funds have also recently added to or reduced their stakes in the stock. BlackRock Inc. acquired a new position in AeroVironment during the second quarter valued at approximately $574,566,000. Geode Capital Management LLC boosted its holdings in shares of AeroVironment by 8.8% during the 4th quarter. Geode Capital Management LLC now owns 884,395 shares of the aerospace company’s stock worth $213,956,000 after buying an additional 71,903 shares during the period. Heard Capital LLC boosted its holdings in shares of AeroVironment by 48.4% during the 4th quarter. Heard Capital LLC now owns 722,150 shares of the aerospace company’s stock worth $174,681,000 after buying an additional 235,685 shares during the period. Stephens Investment Management Group LLC grew its stake in AeroVironment by 18.8% in the 1st quarter. Stephens Investment Management Group LLC now owns 490,426 shares of the aerospace company’s stock valued at $89,772,000 after buying an additional 77,619 shares during the last quarter. Finally, American Capital Management Inc. acquired a new position in AeroVironment in the 2nd quarter valued at $69,745,000. 86.38% of the stock is currently owned by institutional investors and hedge funds.
Analysts Set New Price Targets Several research analysts recently commented on the stock. Raymond James Financial upgraded shares of AeroVironment from a “market perform” rating to an “outperform” rating and set a $210.00 target price on the stock in a report on Thursday, July 16th. Citigroup reaffirmed a “market outperform” rating on shares of AeroVironment in a research report on Thursday, September 10th. Bank of America dropped their price objective on AeroVironment from $225.00 to $185.00 and set a “buy” rating on the stock in a research note on Friday, September 11th. Royal Bank Of Canada lowered AeroVironment from an “outperform” rating to a “sector perform” rating and dropped their price objective for the stock from $210.00 to $180.00 in a research note on Thursday, July 9th. Finally, Piper Sandler cut their price objective on AeroVironment from $248.00 to $235.00 and set an “overweight” rating for the company in a research report on Thursday, July 9th. Two analysts have rated the stock with a Strong Buy rating, eighteen have assigned a Buy rating, three have issued a Hold rating and one has issued a Sell rating to the stock. Based on data from MarketBeat, AeroVironment presently has a consensus rating of “Moderate Buy” and an average price target of $246.47.
Check Out Our Latest Analysis on AeroVironment AeroVironment Price Performance NASDAQ:AVAV opened at $156.45 on Thursday. The stock has a market cap of $7.95 billion, a P/E ratio of -66.86, a PEG ratio of 5.35 and a beta of 1.41. AeroVironment, Inc. has a one year low of $135.20 and a one year high of $417.86. The company has a fifty day moving average price of $156.81 and a 200 day moving average price of $176.01. The company has a debt-to-equity ratio of 0.17, a current ratio of 4.26 and a quick ratio of 3.33.
AeroVironment (NASDAQ:AVAV – Get Free Report) last posted its quarterly earnings results on Wednesday, September 9th. The aerospace company reported $0.59 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.22 by $0.37. The company had revenue of $480.49 million for the quarter, compared to analyst estimates of $451.95 million. AeroVironment had a negative net margin of 5.77% and a positive return on equity of 4.04%. The business’s quarterly revenue was up 5.7% on a year-over-year basis. During the same period last year, the business posted $0.32 EPS. AeroVironment has set its FY 2027 guidance at 3.020-3.340 EPS. Analysts anticipate that AeroVironment, Inc. will post 3.25 earnings per share for the current year.
Insider Transactions at AeroVironment In related news, CAO Brian Shackley sold 205 shares of the stock in a transaction dated Friday, August 14th. The shares were sold at an average price of $201.86, for a total value of $41,381.30. Following the completion of the sale, the chief accounting officer owned 7,888 shares in the company, valued at approximately $1,592,271.68. This trade represents a 2.53% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Stephen Page sold 250 shares of AeroVironment stock in a transaction dated Monday, August 17th. The stock was sold at an average price of $191.98, for a total value of $47,995.00. Following the sale, the director directly owned 48,503 shares in the company, valued at approximately $9,311,605.94. This trade represents a 0.51% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. 0.79% of the stock is currently owned by corporate insiders.
Key Headlines Impacting AeroVironment Here are the key news stories impacting AeroVironment this week:
Positive Sentiment: Funded backlog increased to approximately $1.5 billion at the end of fiscal Q1 2027, up from $1.2 billion at April 30. The backlog represents firm, funded customer orders and provides meaningful revenue visibility, although investors are watching how quickly AeroVironment converts it into sales. AeroVironment Has $1.5 Billion in Funded Backlog Positive Sentiment: AeroVironment secured a reported $100 million U.S. Air Force contract, adding to momentum from a previously highlighted $465 million Army high-energy laser award and reinforcing demand for its defense and counter-drone systems. A $100 Million Reason to Buy AVAV Stock Positive Sentiment: The company signed a long-term agreement with Attalon to incorporate Valaris high-energy laser platforms into its LOCUST and broader directed-energy offerings. The deal could support production capacity as military demand for deployable laser systems grows. Attalon and AeroVironment Execute Long-Term Agreement Positive Sentiment: Goldman Sachs reiterated its Buy rating and $326 price target, citing strong growth visibility and upcoming program catalysts. ARK Invest also purchased additional AVAV shares, potentially improving sentiment. AeroVironment Buy Rating Reiterated Neutral Sentiment: A partnership with Nominal will digitize manufacturing and test data, which may improve production scalability and execution but does not immediately add revenue. AeroVironment Teams Up to Digitize Production Negative Sentiment: Weakness in speculative drone names, including Red Cat and Unusual Machines, is creating sector-wide selling pressure. AVAV has barely moved compared with those peers, reflecting its stronger backlog and defense-program exposure, but the risk-off rotation can still limit near-term gains. Speculative Drone Names Extend Slide About AeroVironment (Free Report)
AeroVironment, Inc is a defense technology company that develops and produces unmanned aircraft systems, loitering munitions, counter-unmanned aircraft systems and related robotic technologies. Its products are designed for intelligence, surveillance and reconnaissance, precision strike, force protection and tactical communications applications.
The company’s portfolio includes the Raven, Puma and Wasp small unmanned aircraft systems; the JUMP 20 vertical takeoff and landing aircraft; and the Switchblade family of loitering munitions.
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Key Takeaways AeroVironment's AxS revenues rose 21% to $346 million, led by higher UAS sales and funded R&D.AVAV secured $464 million for Enduring High Energy Laser, its first directed-energy production contract.The BlueHalo and ESAero acquisitions expanded AVAV's autonomous, space and defense technology portfolio. AeroVironment’s (AVAV - Free Report) Autonomous Systems (“AxS”) business is emerging as an important contributor to the company’s growth. In the first quarter of fiscal 2027, AxS revenues increased 21% year over year to $346 million, driven by higher UAS product sales and increased customer-funded R&D. UAS revenues alone rose 71% to $120 million, reflecting what the company described as increased global demand for UAS products.
AeroVironment is increasingly operating across more than traditional drone systems. Its two reporting segments are Autonomous Systems and Space, and Cyber and Directed Energy, with the latter covering space platforms, cyber capabilities and directed-energy technologies such as high-energy lasers.
The acquisition of BlueHalo in May 2025 significantly expanded this portfolio, incorporating capabilities into both AxS and SCDE. AVAV also acquired ESAero in March 2026, adding a producer of UAS and advanced air-mobility platforms to the Autonomous Systems segment.
This broader portfolio is also producing new contract opportunities. During first-quarter fiscal 2027, AVAV secured its first international commercial order for its LOCUST laser weapon system and received a $464 million Army contract for the Enduring High Energy Laser program — the company’s first directed-energy production contract. It also received a $43 million contract to integrate its PANTHER phased-array antenna onto SkyRange platforms for hypersonic telemetry.
Government customers also remain central to the business: U.S. government revenues represented about $387 million of first-quarter revenues, compared with approximately $94 million from non-U.S. government customers.
Companies Leveraging Autonomous & Defense Technology DemandAlong with AVAV, a few other companies are also benefiting from the same trend, as discussed below:
Kratos Defense & Security Solutions (KTOS - Free Report) : KTOS develops technologies spanning unmanned systems, satellite communications, cyber, missile defense, hypersonics and directed energy, giving it exposure to several of the same defense technology themes as AeroVironment.
Red Cat Holdings (RCAT - Free Report) : Red Cat focuses on unmanned and robotic systems for defense and national security, with its portfolio spanning small UAS and uncrewed surface vessels. The company also has a development partnership with AeroVironment involving Red Cat’s FANG drone and AV’s P550 UAS.
AVAV Stock’s Earnings EstimatesThe Zacks Consensus Estimate for fiscal 2027 earnings per share indicates a year-over-year decline of 1.81%.
Image Source: Zacks Investment Research
AVAV Stock Trades at a DiscountIn terms of valuation, ATRO’s forward 12-month price-to-sales (P/S) is 3.41X, a discount to the industry’s average of 7.14X.
Image Source: Zacks Investment Research
AVAV Stock’s Price PerformanceIn the past three months, the company’s shares have lost 8% compared with the industry’s 20.4% decline.
Image Source: Zacks Investment Research
AVAV’s Zacks RankThe company currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Speculative drone stocks are extending a month-long drift lower Wednesday morning, and the shape of the session is doing most of the talking. The REX Drone ETF (NASDAQ:DRNZ) is up 0.3% to $20.37, holding slightly positive on the day.
PHILADELPHIA--(BUSINESS WIRE)--As demand for mission-ready directed energy capabilities continues to accelerate, AeroVironment executed a long-term agreement (LTA) with Attalon for the delivery of Attalon's Valaris high-energy laser platform across AeroVironment's expanding portfolio of high-energy laser programs. The long-term agreement supports AeroVironment's LOCUST® and broader high-energy laser product line as demand for deployable directed energy capabilities continues to grow. Attalon de.
A science-fiction future is becoming increasingly possible in the present, thanks to rapid advancements in high-energy lasers for military and defense applications. Thanks to major gains in fiber laser technology, tracking, optics, and thermal management, these tools are becoming a reality as potential counter-drone measures, with other applications on the way.
In September 2026, the U.S. Army signaled just how important this technology may be going forward by awarding a major production contract for a high-energy laser weapon system to AeroVironment Inc. NASDAQ: AVAV. That's a significant boon for AVAV stock and a boost for the company as it continues to expand beyond its drone tech foundations.
Add in a strong earnings report in the same month, and AeroVironment looks ready for a major recovery, even as the stock remains down 36% year to date (YTD).
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Beyond this one firm, a new technological opportunity is emerging for laser companies, with several already establishing important footholds.
The Path Forward for AVAV After Laser ContractDespite its poor stock performance this year, AeroVironment offers many appealing qualities for investors. The $465-million contract from the U.S. Army is one of two significant updates from the company's high-energy laser program. It also recently received its first international purchase order for the LOCUST Laser Weapon System, valued at more than $50 million. This may show that AeroVironment is not just a domestic leader in this emerging field but also a key international player.
AeroVironment Today
$153.40 +6.69 (+4.56%)
As of 09/14/2026 04:00 PM Eastern
$135.20▼
$417.86$247.79
The company's latest quarter brought record revenue of $480.5 million, up about 6% year over year (YOY), and a sizable earnings beat relative to predictions. Perhaps even more impressively, AeroVironment's funded backlog climbed by 37% YOY to $1.5 billion.
With a stable balance sheet and building momentum in the company's laser technologies, it seems to have justified its optimistic ratings; 20 Wall Street firms have rated AVAV a Buy, compared to just four who see reason to hesitate, carrying Sell or Hold ratings. The question is what might catalyze a reversal in the firm's share price, and with analysts projecting nearly 36% earnings growth in the coming year, investors may be anticipating an upswing.
Kratos May Be a Closer Competitor Than Its Financials Let OnInvestors might see Kratos Defense & Security Solutions Inc. NASDAQ: KTOS as a potential rival to AeroVironment in the laser space, and while the firm has genuine credentials in the field, its laser work isn't yet visible as a distinct revenue driver.
It provides not only a coherently combined laser system in its HELEX products but also a variety of other system integration and subsystem support tools. The firm's participation in the U.S. Navy's previous Laser Weapon System program speaks to its authority in this new technology.
Kratos Defense & Security Solutions Today
KTOS
Kratos Defense & Security Solutions
$47.58 +0.89 (+1.91%)
As of 09/14/2026 04:00 PM Eastern
$43.09▼
$134.00279.88
$98.06
For now, Kratos reports high-energy laser activity within the broader category of weapon systems, making it difficult for investors to assess how much of the firm's recent 30.5% YOY revenue growth for Q2 2026 may have been driven by laser business.
Still, as Kratos diversifies its offerings, and as the military relies on low-cost, rapidly engaging laser tools more heavily, this firm could be close behind AeroVironment.
KTOS shares have a similar downward trajectory this year, falling by 37% YTD, but also share AVAV's broad analyst support.
Red Cat Benefits From AdjacencyUnlike the firms above, Red Cat Holdings NASDAQ: RCAT does not have a directed energy weapons program. Rather, this drone reconnaissance and counter-drone tech firm offers supplemental systems that are being deployed alongside those laser programs in U.S. military settings. This stock is a play for investors anticipating that AeroVironment's success in the high-energy laser space will have repercussions for other companies in the industry, even those not directly involved in the tech.
Red Cat Today
$7.80 -0.16 (-2.01%)
As of 09/14/2026 04:00 PM Eastern
$5.77▼
$18.78$18.00
Specifically, Red Cat's reconnaissance drones may be able to provide target acquisition, battle damage assessment, and other critical support that could be the difference between laser weapons being effectively operational and just theoretically capable.
Investors may also be drawn to Red Cat for its varied performance compared to the other stocks above. RCAT shares are down only about 1% this year, a substantially smaller YTD decline than both companies above. Like both of those firms, though, Red Cat is an analyst favorite: seven of nine Wall Street firms call it a Buy, and it has significant upside potential, with a consensus price target of $18, about 130% above its current price.
Should You Invest $1,000 in AeroVironment Right Now?Before you consider AeroVironment, you'll want to hear this.
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AeroVironment is surging while its closest drone rivals barely move and the sector ETF sits flat, raising the question of whether today's bid is a genuine turning point or just noise in a stock still deep in the red for…
AeroVironment (NASDAQ:AVAV | AVAV Price Prediction) stock is up 6% to $155.22 midday Monday, extending a post-earnings recovery the rest of the drone group hasn’t joined. The move follows the defense contractor’s fiscal first-quarter results reported earlier this month. The gain still leaves AeroVironment shares down 36% year to date.
Ondas (NASDAQ:ONDS) stock is rising 2% to $7.37 on the same session, giving AeroVironment only a fractional tailwind from a closer counter-drone peer. Red Cat (NASDAQ:RCAT) stock is essentially unchanged, down 0.6% to $7.92, so neither peer is confirming the bid AeroVironment is getting today. The rest of the group is quiet on a day AeroVironment is moving hard.
Meanwhile, the REX Drone ETF (NASDAQ:DRNZ) is up 0.4%, and the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is down 0.2%. A drone fund that’s barely positive on a day AeroVironment stock is rising many times more places today’s action inside one name rather than across the sector. AeroVironment can’t lean on a sector tailwind here, and that’s what turns this into a single-name story.
Earnings Follow-Through Drives the Bid AeroVironment reported record fiscal first-quarter revenue of $480.5 million and funded backlog of $1.5 billion after the close on September 9. That backlog was 37% higher than a year earlier, and management reaffirmed full-year guidance rather than raising it. The reaffirmation sets a firm floor for expectations for AeroVironment without stretching the story ahead of execution risk.
Today’s gain reflects continued follow-through on AeroVironment’s results from earlier this month, with no fresh same-day company announcement to drive it. AeroVironment is scaling its Locust and E-HEL counter-drone laser systems as Locust transitions from testing into production. Adjusted gross margin also widened to 26% from 21% in the year-ago quarter, adding to the operating-leverage case for AeroVironment on the fiscal 2027 report.
Rival Drone Names Sit Still Ondas and Red Cat haven’t reported in this window or announced anything comparable, which is why AeroVironment is climbing alone. The backlog visibility AeroVironment described is specific to a prime contractor running large government programs. It doesn’t automatically translate to smaller drone makers selling into different procurement channels than AeroVironment relies on.
AeroVironment’s fiscal first-quarter bookings reached $700 million and its book-to-bill ratio was 1.4 times, giving the company multi-quarter forward visibility that its smaller peers haven’t matched publicly this month. Ondas and Red Cat both remain earlier in their own commercial ramps. That gap is why AeroVironment can be re-rated on its own report without carrying the group along with it.
AeroVironment’s Locust counter-UAS program carries $464 million in awarded value under the Army’s Enduring High Energy Laser contract, a specific-program scale Ondas and Red Cat can’t match today. That kind of program depth is why AeroVironment reads as a separate story from the smaller drone names. It also anchors the guidance framework AeroVironment reaffirmed on September 9.
A drone fund barely off the flat line confirms that the group isn’t participating on this move. AeroVironment’s 6% gain stands well above the REX Drone ETF’s 0.4% move, and Red Cat’s slight decline underscores that today’s session is about AeroVironment specifically. The broad market is soft too, with SPY lower on the day, so AeroVironment isn’t leaning on a risk-on backdrop for the move either.
What to Watch Next AeroVironment is climbing out of a deep hole rather than breaking out on today’s move. Even with the 6% gain, AeroVironment stock sits 36% below where it started the year. A handful of strong sessions doesn’t yet add up to a trend reversal, and the AeroVironment recovery still has ground to cover before it looks structural.
The bull case for AeroVironment rests on record revenue and the $1.5 billion funded backlog giving visibility smaller peers can’t match at current scale. AeroVironment’s transition of Locust into production adds a second growth vector separate from the mature loitering-munition franchise. That combination is why AeroVironment shares can still move on delayed digestion of the fiscal first-quarter report.
The bear case is that AeroVironment is being re-rated alone while the DRNZ drone ETF and both peers stand still, so the recovery may prove one-off rather than the start of a group-wide bid. Investors can watch for whether more sessions like today’s stack up before adding to their exposure to AeroVironment. Position sizing on AeroVironment stock should stay measured until that follow-through actually appears.
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Philadelphia, Pennsylvania--(Newsfile Corp. - September 14, 2026) - National plaintiffs' law firm Berger Montague PC announces an investigation into the Board of Directors of AeroVironment, Inc. (NASDAQ: AVAV) ("AeroVironment" or the "Company") for potential breaches of fiduciary duties owed to the Company and its shareholders.
The investigation is focused on whether AeroVironment improperly concealed its exposure to competition for work under the U.S. Space Force's Satellite Communication Augmentation Resource ("SCAR") program.
AeroVironment, headquartered in Arlington, Virginia, is a leading American defense technology company that designs and manufactures autonomous systems, unmanned aircraft systems (UAS), loitering munitions, and space and directed-energy technologies in support of the U.S. Department of Defense, allied governments, and commercial clients worldwide.
Shareholders of AeroVironment may learn more about this investigation by contacting Berger Montague: Andrew Abramowitz at [email protected] or (215) 875-3015 or Caitlin Adorni at [email protected] or (267) 764- 4865 or by visiting our website.
About Berger Montague
Berger Montague is one of the nation's preeminent law firms focusing on complex civil litigation, class actions, and mass torts in federal and state courts throughout the United States. With more than $2.4 billion in 2025 post-trial judgments alone, the Firm is a leader in the fields of complex litigation, antitrust, consumer protection, defective products, environmental law, employment law, securities, and whistleblower cases, among many other practice areas. For over 55 years, Berger Montague has played leading roles in precedent-setting cases and has recovered over $50 billion for its clients and the classes they have represented. Berger Montague is headquartered in Philadelphia and has offices in Chicago; Malvern, PA; Minneapolis; San Diego; San Francisco; Toronto, Canada; Washington, D.C., and Wilmington, DE.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/314106
Source: Berger Montague
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LOS ANGELES, Sept. 14, 2026 (GLOBE NEWSWIRE) -- Nominal, the test and operations data platform for engineering teams building complex hardware, today announced a strategic collaboration with AeroVironment (NASDAQ: AVAV), a global leader in intelligent, multi-domain robotic systems.
AeroVironment has spent more than five decades building autonomous systems that have to work the first time, every time, in the field. As the company expands production of its uncrewed aircraft, loitering munitions, and counter-UAS systems across multiple programs and facilities, its engineering and manufacturing teams have adopted Nominal to bring test data capture, cross-team review, and traceability into one system, connecting engineering test through end-of-line manufacturing checks.
"When you're scaling production of systems that can't afford to fail, the data intelligence has to keep up with the hardware," said Cameron McCord, CEO and co-founder of Nominal. "AeroVironment is a proof point for what's possible when a company moving fast on volume also moves fast on rigor. That combination — speed and resilience — is exactly the moment hardware manufacturers across every industry are facing right now, and it's the problem Nominal was built to solve."
"As we scale production across multiple programs and facilities, we need infrastructure that keeps pace without slowing our engineers down," said Scott Bowman, Chief Technology Officer, AeroVironment. "Nominal is giving our teams a shared, connected way to capture, review, and trust test and production data as volume increases and expectations are higher than ever."
While this collaboration is rooted in defense manufacturing, Nominal is built for any team facing the same shift: building more hardware, faster, without losing the rigor that keeps it safe. That means real-time capture of instrument and test data at the edge, browser-based storage and analysis, and a shared record that carries forward from early R&D through full production scale.
That combination is increasingly relevant across aerospace, automotive, robotics, energy, and any other industry now facing their own version of the same question AeroVironment is answering: what does it take to industrialize quickly without sacrificing quality or traceability?
About Nominal
Nominal is the AI-ready engineering data platform that helps aerospace, energy, defense, automotive, and other industrial hardware teams ship breakthrough products faster. Thousands of engineers use Nominal’s platform to confidently operate complex physical systems, while accelerating and automating verification loops from prototype to fleet sustainment. For more information, visit nominal.io.
About AeroVironment
AeroVironment (“AV”) (NASDAQ: AVAV) is a defense technology leader delivering integrated capabilities across air, land, sea, space, and cyber. The Company develops and deploys autonomous systems, loitering munitions, counter-UAS technologies, space-based platforms, directed energy systems, and cyber and electronic warfare capabilities—built to meet the mission needs of today’s warfighter and tomorrow’s conflicts. At the core of these technologies lies AV_Halo™, a modular, mission-ready suite of AI-powered software tools that empowers warfighters and enables full-battlefield dominance: detect, decide, deliver. With a national manufacturing footprint and a deep innovation pipeline, AV delivers proven systems and future-defining capabilities at speed, scale, and operational relevance. For more information, visit www.avinc.com.
AeroVironment is rated a Buy, driven by strong AxS segment growth and significant contract wins, despite recent share price weakness. The AxS segment, led by UAS and PSDS, is the primary growth engine, while SCDE underperforms but holds long-term promise through LOCUST and Titan contracts. Management's FY27 guidance requires substantial H2 EBITDA margin expansion, hinging on high-margin LOCUST commercialization and product mix improvements.
AeroVironment just landed the first-ever production contract for directed-energy weapons in U.S. military history, yet the stock has collapsed nearly 41% over the past year. Something about this story does not add up, and the answer involves a CEO selling…
AeroVironment (NASDAQ:AVAV | AVAV Price Prediction) chairman and chief executive Wahid Nawabi went on CNBC this week with an arithmetic problem for defense investors. Drones being thrown at Western militaries and border installations cost roughly $150,000 apiece, according to Nawabi, while the interceptors historically used to knock them down cost millions of dollars per shot. His pitch is that AeroVironment’s LOCUST directed-energy laser, per Nawabi, brings that engagement cost down to less than $10 per shot.
That is a serious claim, and the U.S. Army evidently took it seriously enough to hand AeroVironment a $464 million Enduring High Energy Laser production award, described on the earnings call as “the first ever production contract for direct energy systems in U.S. military history.” And yet shares are down 40.47% over the past year. The disconnect is what this story is about.
Why $10-a-Shot Lasers Break the Drone Math Ukraine made the cost asymmetry of modern air defense impossible to ignore. When an attacker can send waves of cheap drones and each defensive round costs orders of magnitude more, the defender runs out of money before the attacker runs out of drones.
A directed-energy weapon runs on electricity, so once the platform’s capital cost is amortized, the marginal engagement price collapses. Nawabi frames LOCUST as giving the warfighter “an essentially unlimited magazine.”
The demand backdrop supports him. The Pentagon’s FY2027 budget request earmarks $53.6 billion for drone dominance and counter-drone technologies, including $14.4 billion specifically for counter-unmanned systems development and deployment.
Nawabi told CNBC this is “a prolonged sustained demand profile” that will last at least a decade, and the top-line budget lines up with that view.
Fielded Hardware With an Operational Track Record Directed energy has lived in the research budget for years. What changed in this cycle is that AeroVironment moved from prototype to fielded product.
Management said LOCUST systems are already operating at the southern border, where roughly 300 cartel drones have been shot down year to date, and the FAA has cleared the weapon to operate in national airspace. That track record unlocked the first international commercial order, a $52 million deal signed in the quarter.
The financials caught up too. First-quarter revenue was $480.49 million, adjusted EPS of $0.59 beat the $0.2479 consensus, and funded backlog hit a record $1.50 billion, up 37% year over year, per the company’s 8-K exhibit.
Nawabi even said on the call that LOCUST could become a “half a billion dollar plus a year franchise” within about a year.
Great Bookings, Broken Chart The stock disagrees. AVAV trades at $147.07, down 24.97% in the last month alone and well below the analyst average target of $225.77.
Some of the pain is self-inflicted. The prior fiscal year included a $240.7 million goodwill impairment and a GAAP net loss of $265.122 million, driven by BlueHalo integration charges and the BADGER SCAR stop-work that vaporized roughly $1,493.2 million of unfunded backlog.
Estimate revisions tell the same story. The consensus EPS for the fiscal year ending April 2028 has been cut from $5.3838 90 days ago to $4.3910 today, with 9 down revisions in the past thirty days.
Meanwhile, insiders have been selling into the weakness. Nawabi himself sold 28,265 shares at $139.00 on June 29, 2026. That’s $3.9 million worth of AVAV stock.
What Investors Should Watch Next on AVAV The thesis will be falsified or confirmed by three things: whether the half-billion-dollar LOCUST program that Nawabi cited converts into follow-on international orders, whether the Albuquerque expansion delivers the throughput management has promised, and whether Congress passes the FY2027 defense budget on time rather than dragging out a continuing resolution.
The unspoken risk Nawabi did not raise is program concentration. A single stop-work order already cost the company a $151.3 million impairment on SCAR, and nothing structurally prevents a similar surprise elsewhere in the portfolio.
At a forward P/E of 47x on 3.62x sales, the multiple still assumes execution. But with 86% revenue visibility to the guidance midpoint and a genuinely differentiated laser franchise, the risk-reward has improved as the price has come in.
The setup argues for patience: one more clean quarter of execution and confirmation that LOCUST orders are compounding internationally would go a long way toward validating the growth story Nawabi is telling before the current multiple looks defensible.
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AeroVironment Inc. (NASDAQ:AVAV) shares are falling after B of A Securities maintained its Buy rating on the stock but cut its price target to $185 from $225. Here’s what you need to know.
AeroVironment shares are sliding. What’s weighing on AVAV shares? B of A Securities Cuts its AeroVironment Price TargetB of A Securities analyst Ronald Epstein maintained a Buy rating on AeroVironment while lowering his price target to $185 from $225.
The move comes alongside a mix of other recent analyst activity: Citizens kept a Market Outperform rating and held its target at $230 on Sept. 10, while JPMorgan raised its target to $210 the same day while maintaining an Overweight rating. AeroVironment carries an overall Buy rating on Wall Street, with an average price target of $214.93, according to Benzinga Pro.
AeroVironment’s Chart Remains in a Longer-Term DowntrendThat price target cut lands on a stock that’s already deep in a multi-month slide. Shares sit roughly 9% under their 20-day average, 11% beneath the 50-day mark, nearly 16% below the 100-day line and a steep 33% under the 200-day average, a lineup that typically means buyers face resistance every time they try to push the stock higher until it can climb back above at least its shorter-term benchmarks. Compounding that, the 20-day average trailing behind the 50-day confirms sellers still hold the advantage in the near term.
A more troubling signal comes from the death cross that showed up back in March, when the 50-day line slipped beneath the 200-day, historically a marker that bears remain firmly in charge over longer stretches. The MACD indicator points in the same bearish direction, sitting under its own signal line with a negative histogram reading, hinting that whatever bounce the stock has managed lately may not have real staying power unless buying demand suddenly intensifies.
With shares parked near their 52-week low of $135.20 and nowhere close to the $417.86 peak reached over the past year, this looks less like an ordinary dip and more like the stock working through a deeper reset. Should the current floor crack, chart watchers typically start eyeing the next level down as a landing spot; if the floor holds instead, attention turns to whether a rebound has enough force to push past resistance and absorb the selling that tends to emerge near overhead averages.
$162.50 marks the ceiling to watch, an area close to where the 50-day and 100-day averages sit and a zone that has previously attracted sellers. On the downside, $140.50 stands out as the level currently being challenged, sitting just a bit above the stock’s 52-week floor.
AVAV Shares Are FallingAVAV Price Action: AeroVironment shares were down 3.53% at $141.88 at the time of publication on Friday. The stock is near its 52-week low of $135.19, according to Benzinga Pro.
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Key Takeaways AVAV shares fell 30.6% in six months, lagging the industry as near-term fundamentals remain weak.Revenues rose 6% to $480.5M in fiscal Q1 2027, while earnings per share increased to 59 cents from 32 cents.AeroVironment secured a $50M-plus LOCUST order but faces persistent labor and supply-chain risks. AeroVironment, Inc. (AVAV - Free Report) stock has lost 30.6% in the past six months, underperforming both the Zacks Aerospace-Defense Equipment industry’s decline of 12.1% and the broader Zacks Aerospace sector’s decline of 13.5%. It also came below the Zacks S&P 500 Composite’s return of 13.9% in the same time frame.
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Other industry players, such as AAR Corp. (AIR - Free Report) and Astronics Corporation (ATRO - Free Report) , have delivered a stellar performance in the past six months. Shares of AIR and ATRO have risen 19.9% and 29.9%, respectively, in the said period.
With AVAV’s shares declining over the past six months, investors may have mixed views. Some may remain cautious, while others may see the decline as an opportunity. Before deciding whether to buy, hold or sell, it is important to review whether the company’s fundamentals support long-term growth or if near-term challenges are likely to persist. Evaluating AVAV’s growth prospects and risks can help in making a well-informed investment decision.
Risks to Consider Before Choosing AVAVAeroVironment continues to operate amid several industry-specific challenges that could affect execution and financial performance. Ongoing labor shortages may constrain workforce availability across manufacturing and engineering functions, potentially limiting production capacity. This could create bottlenecks in fulfilling defense contracts, increase overtime and training expenses, and raise the risk of delivery delays, particularly as demand for unmanned systems remains strong.
Supply-chain disruptions are another key headwind. Challenges in sourcing specialized components and electronics may result in longer lead times and higher procurement costs, putting pressure on margins and complicating production planning. These constraints could also limit the company’s ability to scale production efficiently. Similar issues are affecting peers such as AAR and Astronics, suggesting that labor and supply-chain constraints are broader industry challenges rather than company-specific issues.
Tailwinds for AVAVAeroVironment continues to expand its defense business while delivering year-over-year growth. In September 2026, the company reported fiscal 2027 first-quarter results, with revenues rising 6% year over year to $480.5 million, driven by higher product sales and service revenues. Earnings per share increased to 59 cents from 32 cents in the prior-year quarter.
In September, AVAV also secured its first international purchase order for the LOCUST Laser Weapon System. Valued at more than $50 million, the direct commercial sale includes LOCUST systems and related support. It marks a significant step in the global adoption of the company’s directed-energy counter-drone technology. The order follows the U.S. Army’s recent selection of LOCUST for a $464.8 million Enduring-High Energy Laser contract, further strengthening AVAV’s position in the growing counter-UAS market.
Estimates for AVAV’s Sales & EarningsThe Zacks Consensus Estimate for AVAV’s fiscal 2027 sales implies year-over-year growth of 9.8%, while estimates for fiscal 2028 sales indicate an improvement of 15.8%.
Image Source: Zacks Investment Research
The consensus estimate for AVAV’s fiscal 2027 earnings implies a year-over-year decline of 3.3%, while estimates for fiscal 2028 earnings indicate an improvement of 29.1%.
Image Source: Zacks Investment Research
ValuationIn terms of valuation, AVAV’s forward 12-month price-to-earnings (P/E) is 41.47X, a premium to the industry average of 33.59X. This suggests that investors will be paying a higher price relative to the company's expected earnings growth compared with its industry average.
Image Source: Zacks Investment Research
ROE: AVAV vs. Sub-IndustryAVAV’s return on equity stands at 4.04%, below the industry level of 15.35%. This indicates that the company is less effective than its peers at generating profits from shareholders’ equity.
Liquidity Position of AVAVAVAV has a current ratio of 4.26. The ratio, being more than one, indicates that AVAV possesses sufficient capital to pay its short-term debt obligations.
Its industry peers, AAR and Astronics, also maintain current ratios above one. AIR has a current ratio of 2.84, while ATRO holds 2.97.
Wrapping UpDespite AeroVironment’s long-term growth initiatives and solid liquidity position, its near-term fundamentals remain relatively weak. The stock has lagged the broader industry in recent months, while several peers have posted stronger gains.
AVAV trades at a premium valuation to the industry and its return on equity remains well below the sub-industry average. With key operational risks still present, investors may want to avoid AeroVironment stock at current levels.
AVAV currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Hsbc Holdings PLC lifted its stake in AeroVironment, Inc. (NASDAQ:AVAV – Free Report) by 60.1% in the second quarter, according to the company in its most recent 13F filing with the Securities and Exchange Commission. The firm owned 22,294 shares of the aerospace company’s stock after acquiring an additional 8,369 shares during the period. Hsbc Holdings PLC’s holdings in AeroVironment were worth $3,615,000 as of its most recent filing with the Securities and Exchange Commission.
Several other institutional investors and hedge funds have also made changes to their positions in the stock. BlackRock Inc. acquired a new stake in shares of AeroVironment in the second quarter valued at $574,566,000. American Capital Management Inc. acquired a new stake in AeroVironment during the second quarter valued at approximately $69,745,000. Bank of America Corp DE acquired a new stake in AeroVironment during the second quarter valued at approximately $67,549,000. Norges Bank bought a new stake in AeroVironment during the fourth quarter worth approximately $94,655,000. Finally, Korea Investment CORP bought a new stake in AeroVironment during the second quarter worth approximately $54,901,000. 86.38% of the stock is currently owned by institutional investors.
Analyst Ratings Changes Several research analysts have issued reports on the company. Wall Street Zen raised AeroVironment from a “sell” rating to a “hold” rating in a report on Sunday, July 5th. Royal Bank Of Canada lowered AeroVironment from an “outperform” rating to a “sector perform” rating and reduced their price objective for the stock from $210.00 to $180.00 in a research note on Thursday, July 9th. Piper Sandler decreased their target price on AeroVironment from $248.00 to $235.00 and set an “overweight” rating on the stock in a report on Thursday, July 9th. KeyCorp reaffirmed an “overweight” rating on shares of AeroVironment in a research report on Tuesday, July 28th. Finally, Citigroup reaffirmed a “market outperform” rating on shares of AeroVironment in a report on Thursday. Two equities research analysts have rated the stock with a Strong Buy rating, eighteen have given a Buy rating, three have issued a Hold rating and one has assigned a Sell rating to the company’s stock. According to MarketBeat, AeroVironment presently has a consensus rating of “Moderate Buy” and an average target price of $249.89.
Check Out Our Latest Report on AeroVironment AeroVironment Trading Up 4.5% NASDAQ AVAV opened at $147.07 on Friday. AeroVironment, Inc. has a twelve month low of $135.20 and a twelve month high of $417.86. The company has a debt-to-equity ratio of 0.17, a quick ratio of 3.59 and a current ratio of 4.30. The stock has a market cap of $7.47 billion, a price-to-earnings ratio of -62.85, a PEG ratio of 4.87 and a beta of 1.41. The firm’s 50 day moving average price is $158.30 and its two-hundred day moving average price is $179.00.
AeroVironment (NASDAQ:AVAV – Get Free Report) last announced its earnings results on Wednesday, September 9th. The aerospace company reported $0.59 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.22 by $0.37. The company had revenue of $480.49 million for the quarter, compared to the consensus estimate of $451.95 million. AeroVironment had a negative net margin of 5.77% and a positive return on equity of 4.06%. The company’s revenue was up 5.7% on a year-over-year basis. During the same period in the previous year, the business earned $0.32 EPS. AeroVironment has set its FY 2027 guidance at 3.020-3.340 EPS. Equities analysts anticipate that AeroVironment, Inc. will post 3.2 EPS for the current year.
AeroVironment News Roundup Here are the key news stories impacting AeroVironment this week:
Positive Sentiment: Quarterly earnings beat expectations. Fiscal Q1 2027 revenue reached a record $480.5 million, up 5.7% year over year and above the roughly $452 million consensus. Adjusted EPS of $0.59 substantially exceeded the $0.22 estimate and improved from $0.32 a year earlier. AeroVironment Announces Fiscal 2027 First Quarter Results Positive Sentiment: Backlog and bookings support future revenue. Funded backlog rose 37% year over year to a record $1.5 billion, while quarterly bookings totaled approximately $700 million and produced a 1.4 book-to-bill ratio. Management said fiscal 2027 is off to a strong start and expects a stronger second half as capacity investments ramp. AeroVironment Q1 2027 Earnings Call Transcript Positive Sentiment: International LOCUST order expands the growth opportunity. AeroVironment announced its first international commercial purchase of the LOCUST directed-energy counter-drone system, valued at more than $50 million. The order reinforces investor optimism that laser weapons could become a significant franchise alongside the company’s drone businesses. AV Secures First International Order for LOCUST Systems Positive Sentiment: Analysts raised their targets. JPMorgan increased its target to $210 and maintained an Overweight rating, while Needham, BTIG and Citizens JMP reiterated bullish ratings with targets ranging from $205 to $230. Neutral Sentiment: Full-year guidance was maintained. Fiscal 2027 revenue guidance remains approximately $2.1 billion to $2.2 billion, with EPS guidance of $3.02 to $3.34. This supports stability but does not represent a new outlook increase. Negative Sentiment: Growth and profitability concerns persist. Critics noted that revenue growth is moderating, the company still posted a GAAP net loss, and full-year revenue guidance is slightly below consensus. High valuation and execution risks could limit the recovery if the expected second-half ramp disappoints. Why AeroVironment’s Latest Report Is a Red Flag Insider Buying and Selling at AeroVironment In other AeroVironment news, Director Stephen Page sold 250 shares of the firm’s stock in a transaction dated Monday, June 15th. The stock was sold at an average price of $174.41, for a total transaction of $43,602.50. Following the completion of the sale, the director directly owned 49,001 shares in the company, valued at approximately $8,546,264.41. This trade represents a 0.51% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CAO Brian Shackley sold 205 shares of AeroVironment stock in a transaction dated Friday, August 14th. The shares were sold at an average price of $201.86, for a total value of $41,381.30. Following the transaction, the chief accounting officer directly owned 7,888 shares in the company, valued at approximately $1,592,271.68. This trade represents a 2.53% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold 705 shares of company stock worth $132,979 over the last three months. 0.79% of the stock is owned by insiders.
AeroVironment Company Profile (Free Report)
AeroVironment, Inc is a defense technology company that develops and produces unmanned aircraft systems, loitering munitions, counter-unmanned aircraft systems and related robotic technologies. Its products are designed for intelligence, surveillance and reconnaissance, precision strike, force protection and tactical communications applications.
The company’s portfolio includes the Raven, Puma and Wasp small unmanned aircraft systems; the JUMP 20 vertical takeoff and landing aircraft; and the Switchblade family of loitering munitions.
See Also Five stocks we like better than AeroVironment AeroVironment’s Record Backlog and Earnings Beat Fuel Recovery Case Corning Just Locked In a Massive Verizon Fiber Deal as AI Infrastructure Expands 3 Under-$20 Stocks Tied to the Future of U.S. Energy and Materials Uncle Sam’s Quantum Leap: Feds Fund a $300M Quantum Supercycle Want to see what other hedge funds are holding AVAV? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for AeroVironment, Inc. (NASDAQ:AVAV – Free Report).
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Aerovironment (AVAV +4.45%) has struggled to gain traction on the market in 2026 as the company's drone business has lost some momentum. And recently reported earnings don't show any signs that results are picking up anytime soon. Double-digit growth on the top line won't wow investors, and struggles turning that into net income are a real problem long-term. I dig into the results and whether or not this is a value in this video.
*Stock prices used were end-of-day prices of September 10, 2026. The video was published on September 10, 2026.
Travis Hoium has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AeroVironment. The Motley Fool has a disclosure policy. Travis Hoium is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.
As of 11:45 AM ET, the S&P 500 (^GSPC -0.61%) is down 0.38% to 7,607, the Nasdaq Composite (^IXIC -0.61%) has slipped 0.42% to 26,140, and the Dow Jones Industrial Average (^DJI -0.71%) is trading 0.49% lower at 52,156 as higher oil prices weigh on markets.
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Gold is down 1.09% to $4,412.10, and the 10-Year Treasury yield has climbed to 4.92%, a 10-year high. Utilities and consumer cyclicals saw the biggest sector gains, while basic materials fell.
Today's biggest movesApple (AAPL +2.78%) gained slightly as investors digested the launch of its new foldable iPhone. AeroVironment (AVAV +9.21%) popped after the drone maker announced record revenue and a strong backlog. Macy's (M -4.11%) slipped despite an earnings beat.
What this means for investorsBrent crude reached over $106 a barrel today, as tensions in the Middle East continue to escalate. Oil prices had fallen in recent months on hopes that a peace agreement could be negotiated, but strikes in recent days have further restricted traffic through the Strait of Hormuz. The surge in oil prices put pressure on stocks and bonds, as traders priced in a near 70% likelihood of a Federal Reserve rate hike next week.
The Fed has made it clear that it is committed to curbing inflation, and rate hikes can be an important tool in that mission. Wholesale inflation data released today showed the Producer Price Index grew by 0.4% in August, in line with expectations. Investors will be watching Friday's Consumer Price Index data, as it could influence the Fed's decision.
Investors may have become familiar with this headline-driven market in the initial months of the conflict in Iran. Whatever the headlines are doing, the core philosophy of investing hasn't changed: look for quality stocks and be prepared to hold them for five years or more. It can be hard to hold through the volatility, but that long-term focus is a proven way to build wealth.
Emma Newbery has positions in Apple. The Motley Fool has positions in and recommends AeroVironment and Apple. The Motley Fool has a disclosure policy.
AeroVironment's NASDAQ: AVAV stock price is poised for a full recovery, driven by surging demand and a record-breaking backlog.
AeroVironment Today
$150.35 +9.55 (+6.78%)
As of 02:47 PM Eastern
This is a fair market value price provided by Massive. Learn more.
$135.20▼
$417.86$249.89
Highlights from the company's Q1 include $1.5 billion in funded backlog, up 37% year over year, and $2.8 billion in total backlog, providing clear visibility into the coming quarters.
More importantly, the backlog increase validates the company's technology.
Get AeroVironment alerts:
Recent orders include $500 million from the Army and international partners for advanced counter-drone technology, including ground-based lasers and unmanned aircraft.
Aerovironment Posts Double Beat in Q1, Market Responds FavorablyAeroVironment reported a robust Q1 of its fiscal year 2027 (FY2027), with revenue up approximately 6% to a record $480.5 million. The top line outpaced the MarketBeat consensus estimate by 580 basis points, driven by strength in products and services. Segmentally, Autonomous Systems, which include drones and counter-drone technology, was the strongest, up 21%, offset by a 21% contraction in the smaller Space, Cyber, and Directed Energy segment. Looking ahead, $0.7 billion in bookings and a 1.4x book-to-bill ratio suggest strength will continue in the coming quarters.
Margin was a catalyst for the stock price. The company widened its margin on a GAAP and adjusted basis, significantly narrowing GAAP losses and accelerating adjusted earnings growth. Key details include $53.4 million in EBITDA and 59 cents in adjusted earnings per share (EPS), up 84% year over year (YOY) and more than double the analyst consensus.
Analysts responded vigorously to the earnings news. Initial reactions included bullish commentary highlighting the massive double beat, the surging backlog, and the likelihood of cautious guidance. The company merely reaffirmed its full-year guidance, setting the stage for outperformance in the upcoming quarters. Until then, analysts rate the stock as a consensus of Moderate Buy and show high conviction, with 21 of 24 rating it as a Buy. The average price target assumes more than 80% upside from the critical support level, gains that could be realized within a few quarters.
Institutional and Analyst Data Say AVAV Stock Is at Rock BottomThe chart price action suggests that AVAV stock is at rock bottom, and that outlook is reinforced by the analysts' target range and institutional activity. The analysts' low end is pegged at $166, which is about $26 above early September trading levels and critical support targets. Institutions, meanwhile, have been accumulating shares, with activity ramping up over the preceding quarters and on track for record levels in Q3. With this in play, shares are unlikely to move significantly below $140.
AeroVironment’s balance sheet provides no red flags. The biggest change at the end of Q1 is lower cash, but this is offset by higher investments, receivables, and inventory. Current and total assets and current and total liabilities are relatively flat, as is equity, leaving the company in a solid position to continue executing its strategy. Included in its strategy is a transition from product supplier to prime contractor capable of delivering complete defensive systems.
AeroVironment’s Rewards Outweighs the RisksThis year’s catalysts include scaling its Locust and E-HEL systems. They encompass low-cost-per-shot, highly adaptable ground- and vehicle-based counter-drone technology. The tech centers on lasers and utilizes standard Xbox-type controllers to target drones from remote locations. The laser is a highly concentrated beam of light that heats the target to thousands of degrees within seconds of contact, melting chassis and detonating ordnance. The Locust system matters because it is the first laser weapon to leave the testing range and move into scaled production for battlefield environments; investors can expect demand to surge.
Longer-term catalysts center on the Space, Cyber, and Directed Energy segment. Space is a budding sector, estimated at nearly $600 billion as of 2026 and expected to triple in size over the next decade. AeroVironment supports space through secure communications, laser data connections, and specialized hardware for satellites and lunar missions.
AeroVironment's biggest risks this year include cash burn and execution risk tied to scaling manufacturing. However, the earnings results suggest cash burn is coming back under control and ramping is going smoothly. In this scenario, the company is on track to continue converting backlog into revenue and cash flow and may soon reach GAAP profitability. Other risks include its dependence on government and defense contracts, but that too is mitigated. Governments are not only increasing their spending plans but also focusing on next-gen technology, specifically unmanned systems, putting AeroVironment in an enviable position.
Opportunities for investors include a takeover. While AeroVironment is aggressively acquiring and strengthening its prime contractor position, it is an attractive target for large aerospace/defense contractors. Potential suitors include Lockheed Martin NYSE: LMT, RTX NYSE: RTX, and Boeing NYSE: BA.
Should You Invest $1,000 in AeroVironment Right Now?Before you consider AeroVironment, you'll want to hear this.
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U.S. stocks were lower, with the Dow Jones index falling around 250 points on Thursday.
Shares of Wealthfront Corp (NASDAQ:WLTH) rose sharply during Thursday’s session following better-than-expected second-quarter results.
Wealthfront reported quarterly earnings of 10 cents per share which beat the analyst consensus estimate of 8 cents per share. The company reported quarterly sales of $91.874 million which beat the analyst consensus estimate of $91.618 million.
Wealthfront shares surged 6.6% to $10.08 on Thursday.
Here are some other big stocks recording gains in today’s session.
Orchestra Biomed Holdings Inc (NASDAQ:OBIO) shares surged 8.4% to $5.91. BTIG analyst Marie Thibault upgraded Orchestra BioMed from Neutral to Buy and announced a $10 price target.Clover Health Investments Corp (NASDAQ:CLOV) shares jumped 7.6% to $4.67.AeroVironment, Inc. (NASDAQ:AVAV) surged 7.2% to $150.96 following upbeat quarterly earnings.Vogenx, Inc. (NASDAQ:VOGX) gained 6.6% to $31.76.Priority Technology Holdings Inc (NASDAQ:PRTH) shares jumped 6.4% to $5.77.Pulse Biosciences Inc (NASDAQ:PLSE) gained 6.1% to $56.18. Freedom Capital Markets, on Wednesday, initiated coverage on the stock with a Buy rating and announced a $73 price target.Molina Healthcare Inc (NYSE:MOH) gained 6.1% to $206.03. Molina Healthcare announced it will issue its earnings release for the third quarter, after the market closes on Wednesday, Oct. 21.Ubiquiti Inc (NYSE:UI) shares rose 5.8% to $550.55.Centene Corp (NYSE:CNC) shares gained 5.3% to $67.43.PayPay Corp – ADR (NASDAQ:PAYP) rose 3.8% to $18.25.Photo via Shutterstock
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AeroVironment, Inc. (NASDAQ:AVAV) on Wednesday posted better-than-expected first-quarter results.
AeroVironment posted first-quarter revenue of $480.49 million, beating analyst estimates of $456.20 million, according to Benzinga Pro. The drone maker reported adjusted earnings of 59 cents per share for the quarter, beating estimates of 24 cents per share.
“AV’s fiscal year 2027 is off to a strong start, with record first-quarter revenue and funded backlog and landmark strategic wins,” said Wahid Nawabi, AeroVironment chairman, president and chief executive officer. “Our team is united in our mission to execute with discipline and capture demand for the key franchise programs that matter most to our customers, and that is exactly what we did in the first quarter.”
AeroVironment guided for fiscal 2027 revenue of $2.125 billion to $2.225 billion. Analysts are forecasting revenue of $2.195 billion. The company also affirmed expectations for fiscal 2027 adjusted earnings of $3.02 to $3.34 per share versus estimates of $3.23 per share.
AeroVironment shares gained 10.4% to trade at $155.58 on Thursday.
These analysts made changes to their price targets on AeroVironment following earnings announcement.
UBS analyst Gavin Parsons maintained the stock with a Neutral and raised the price target from $166 to $170. JP Morgan analyst Seth Seifman maintained the stock with an Overweight rating and raised the price target from $200 to $210. Trending
Considering buying AVAV stock? Here’s what analysts think:
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AeroVironment (NASDAQ:AVAV) shares are up 6% to trade at $149.33 after the company reported fiscal first-quarter earnings and revenue that surpassed Wall Street's estimates.
Key Takeaways AeroVironment kept fiscal 2027 guidance unchanged after Q1 revenues and adjusted EPS topped estimates.LOCUST could exceed $500M in annual revenues in about a year as AeroVironment expands production.Backlog, capacity expansion and higher volumes are expected to support AeroVironment's second-half ramp-up. AeroVironment, Inc. (AVAV - Free Report) used its first-quarter fiscal 2027 earnings call to stress that backlog and recent program wins are moving several product lines toward higher-volume production, with LOCUST directed energy at the center of the growth discussion.
AVAV reported first-quarter revenues of $480.49 million and adjusted EPS of $0.59, which beat the Zacks Consensus Estimate of $467.9 million and $0.22, respectively. Management cited budget timing and a back-half-weighted delivery profile as key variables. The company kept full-year guidance unchanged.
AVAV Reaffirms Guidance Despite Early StrengthExecutive vice president and CFO Sean Woodward reaffirmed fiscal 2027 revenue guidance of $2.125 billion to $2.225 billion, adjusted EBITDA of $305 million to $325 million and non-GAAP EPS of $3.02 to $3.34.
Woodward said revenues should remain weighted 45% to the first half and 55% to the second half. Adjusted EBITDA is expected to follow a one-third, two-thirds split, while non-GAAP EPS is planned at roughly 30% and 70%.
The CFO pointed to $1.5 billion of funded backlog and 86% revenue visibility to the midpoint of full-year guidance as support for the outlook.
AeroVironment Puts LOCUST at the Growth CenterChairman, president and CEO Wahid Nawabi framed LOCUST as a major commercialization opportunity after the nearly $465 million U.S. Army E-HEL award and the first international direct commercial sale.
In Q&A, a BTIG analyst asked about LOCUST profitability. Nawabi said higher volumes and firm-fixed-price production contracts should strengthen margins in the second half, with SCDE targeted to approach the AxS margin model over the next couple of years.
Nawabi also said LOCUST could become a more than $500 million annual franchise in about a year as AeroVironment expands production and pursues additional domestic and international opportunities.
AVAV Expands Capacity Around Franchise ProgramsWoodward said fiscal 2027 capital spending remains planned at 12% to 14% of revenues, with free cash flow expected to be negative as AeroVironment funds production capacity.
Projects include a $100 million Southern California campus investment, a 200,000-square-foot Salt Lake City facility for loitering munitions, Albuquerque expansion for LOCUST and added Huntsville capacity for Freedom Eagle-1.
Asked by a UBS analyst whether capacity unlocks awards, Nawabi said demonstrated production readiness has supported past wins. He tied current investments in LOCUST, Red Dragon and Freedom Eagle-1 to customer demand and future contracting opportunities.
AeroVironment Balances AxS Growth and SCDE PressureWoodward said Autonomous Systems revenues rose 21% year over year to $346 million, while SCDE revenues declined 21% to $134.5 million, reflecting the SCAR termination and other discontinued government programs.
Adjusted gross margin improved to 30% from 29%. Product margin reached 40%, but service margin fell to 8% as lower Cyber & Mission Solutions volume left fixed costs underabsorbed.
Nawabi said cyber and mission services are not central to the company’s long-term growth thesis. Woodward added that higher service volumes should improve margins, while product commercialization remains the main path for EBITDA expansion.
AVAV Q&A Focuses on Budget Timing and Second HalfA Stifel analyst asked why management did not raise guidance after the strong quarter. Nawabi pointed to uncertainty around the timing of the U.S. government’s fiscal 2027 budget, while maintaining that it is not a significant risk to current guidance.
A Piper Sandler analyst asked how the continuing resolution factors into the outlook. Woodward said guidance assumes a short-term continuing resolution followed by an approved defense budget in the December time frame.
Woodward also said second-quarter adjusted EBITDA should step down as sales mix softens and internal R&D spending rises before higher volume and mix support the second half.
AeroVironment Stays Focused on Delivery and ScaleNawabi’s closing emphasis remained on execution, capacity expansion and supply-chain readiness as the company moves recently awarded programs toward production.
Management combined confidence in demand with discipline on timing, prioritizing manufacturing scale and program delivery while preserving its full-year outlook against an uncertain government budget schedule.
AVAV’s Zacks Rank and Style Scores Point to Weak SignalsAVAV carries a Zacks Rank #4 (Sell), which reflects an unfavorable earnings estimate-revision backdrop. Its Value Score is D, Growth Score is C, Momentum Score is F and VGM Score is D, indicating weaker style characteristics overall.
The Zacks framework places primary weight on estimate revisions, while Style Scores assess value, growth and momentum over a similar near-term horizon. The Zacks Rank can change as analysts revise estimates following the just-reported results.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of AeroVironment (AVAV +10.88%) charged out of the gate on Thursday, soaring as much as 13%. As of 11:18 a.m. ET, the stock was still up 11%.
The catalyst that sent the drone-maker higher was a financial report that wowed investors.
Image source: The Motley Fool. -
AVAV takes flight For its fiscal 2027 first quarter (ended Aug. 1), AeroVironment generated record revenue of $480.5 million, up 6% year over year, driven by robust sales in its autonomous systems segment. This drove adjusted diluted earnings per share (EPS) of $0.59, up 84%.
For context, analysts' consensus estimates called for revenue of $456.1 million and adjusted EPS of $0.25, so AeroVironment surpassed both measures with room to spare.
Revenue from the space, cyber, and directed energy (SCDE) segment fell 21% year over year to $134 million, but the automated systems (AxS) segment more than made up the shortfall, climbing 21% to $346 million.
There were other reasons to celebrate. AeroVironment's bookings jumped 71% to $683 million, pushing its book-to-bill ratio to 1.4. This suggests demand is currently outpacing supply. The company also reported a record funded backlog that climbed 37% year over year and 23% quarter over quarter to $1.5 billion, while its unfunded backlog -- which includes expected, but not obligated, future business -- was $1.4 billion.
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Investors were pleased that management maintained the company's full-year outlook, forecasting revenue of roughly $2.175 billion, representing 10% growth, and adjusted diluted EPS of $3.16, a 4% decline, both at the midpoint of its guidance. Management noted that the expected lower profits were the result of planned capacity and facility expansion and higher depreciation expenses -- which will support future growth.
The loss of a major contract and accounting issues earlier this year have weighed on AeroVironment, which remains 62% off its late 2025 peak. However, that decline has had a corresponding impact on its valuation.
The stock is currently selling for 48 times forward earnings and 35 times next year's expected earnings, the lowest multiples in more than a year. This gives astute investors the chance to pick up AeroVironment shares at a rare discount.
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
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Buy AVAV. Earnings showed real operating leverage: gross margin up to 31%, operating loss narrowed to $10.9M, and backlog jumped to $1.5B. The $468M high-energy laser (E-HEL) award plus continued drone demand supports the company’s revenue/EBITDA guidance. Technicals back it: repeated holds near $134 and a triple-bottom with neckline around $207 sets up a rebound toward $200 then $207.
Key Risk: A major delay or cancellation in large defense programs (especially E-HEL) that turns backlog growth into slower revenue and margin improvement.
Defense drone supply chain (LMT)
Buy Lockheed Martin (LMT) as a second-order beneficiary. AVAV’s backlog and manufacturing expansion signal broader scale-up across counter-drone and autonomous systems; primes like LMT typically see follow-on demand through components, integration, and shared programs. If AVAV’s turnaround sticks, investors rotate from single-name risk into prime defense exposure, lifting LMT even if its own numbers don’t move immediately.
Key Risk: Defense budgets tighten or procurement shifts away from counter-drone/autonomous systems, reducing follow-on orders to primes.
AeroVironment stock has come under intense pressure in the past few months, crashing from $417 in October last year to $140.80. That downtrend is now being tested after the company published a strong earnings report, demonstrating solid revenue and backlog growth.
AVAV stock rose by over 3% after the defense contractor published its financial results. These numbers showed that its revenue rose by 6% in the first quarter of fiscal 2027 to $480.5 million.
This increase was driven by a $15.5 million product sales and $10.3 million in service revenue. Its Autonomous Systems segment had over $346 million in sales as demand for drones continues to grow.
This growth will likely continue growing because of the changing nature of warfare today, where cheap drones are becoming more popular. Its Space, Cyber, and Directed Energy (SCDE) segment made over $134.5 million in revenue.
AeroVironment’s gross margins jumped to 31%, driven by its product revenue and offset by the services segment. Most notably, its loss from operations narrowed to $10.9 million from $69.3 million in the same period last year. Wahid Nawabi, the CEO said:
“Our customers are continuing to field autonomous capabilities at increasing scale, and our priority is expanding manufacturing capacity across our sites and strengthening our supply chain.”
AeroVironment’s backlog continued growing, reaching $1.5 billion, up from $1.2 billion from the previous quarter. On Wednesday, the company reported that it had been awarded a $468 million contract to produce high-energy laser weapon systems for the counter-drone missions. This contract covers the Army Enduring-High Energy Laser (E-HEL) program.
Its other notable contracts were the $500 million precision strike and defensive systems, $464 million space and directed energy, and $117 million uncrewed aircraft system.
AeroVironment’s management expects its revenue growth will continue and its profitability metrics improve. It now expects that its annual revenue will jump to between $2.12 billion and $2.22 billion, with the adjusted EBITDA being between $305 million and $325 million.
Yahoo Finance data shows that analysts expect the annual revenue to rise by 10.8% this year to $2.19 billion followed by 15% growth to $2.53 billion.
AVAV stock chart | Source: TradingView
The daily chart shows that the AVAV stock has been in a strong downward trend in the past few months and is now sitting at a crucial support level. It has failed to move below this level - $134 - several times since June this year. That is a sign that shorts are afraid of placing trades below that level.
The stock formed a triple-bottom pattern whose neckline is at $207, its highest level on August 14 this year. Therefore, there is a likelihood that investors will start buying the dip in the coming days or weeks. If this happens, the initial target to watch will be the psychological level of $200. This target is about 35% above the current level.
AeroVironment just landed a milestone international order for a laser weapon that costs under $10 per shot to fire, and the stock is moving while the rest of the drone sector sits out the rally entirely.
AeroVironment (NASDAQ:AVAV | AVAV Price Prediction) stock is up 5% to $147.90 in early Thursday trading after the company reported fiscal Q1 2027 results and announced its first international commercial order for the LOCUST laser weapon system. It’s a company-specific move against a softer backdrop for the rest of the defense-drone complex.
Unusual Machines (NYSEAMERICAN:UMAC) stock is holding steady, up 0.1% to $24.34. Meanwhile, Ondas (NASDAQ:ONDS) stock is slipping, down 1% to $7.21, as the drone group doesn’t catch a broader bid on AeroVironment’s news.
The thematic Defiance Drone and Modern Warfare ETF (NYSEARCA:JEDI) is down 1%, so the sector barometer confirms the drift. The SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is off 0.46%, which frames AeroVironment’s rally as a company-specific repricing rather than a broad risk-on move.
First International LOCUST Order Fuels the Rally AeroVironment announced a $50 million first international commercial order for the LOCUST directed-energy counter-UAS laser weapon system, covering an initial delivery of systems and associated support. That deal comes on the heels of AeroVironment’s selection for the U.S. Army’s $464.8 million Enduring High Energy Laser (E-HEL) production contract, which the company describes as the first production award for high-energy laser weapon systems in U.S. history.
The Autonomous Systems segment drove the beat with revenue of $346 million, up 21% year over year (YoY), powered by P550, Jump 20X, and Puma. Q1 bookings of $700 million produced a 1.4x book-to-bill ratio, giving AeroVironment visibility into a second half that management expects to carry the majority of full-year adjusted EBITDA.
AeroVironment reported fiscal Q1 2027 adjusted EPS of $0.59, beating the $0.2479 consensus, on revenue of $480.49 million that grew 5.7% YoY. Funded backlog reached a record $1.5 billion, and management reaffirmed fiscal 2027 revenue guidance of $2.125 billion to $2.225 billion, according to AeroVironment.
AeroVironment CEO Wahid Nawabi stated, “LOCUST gives our customers an affordable, scalable way to defeat drone threats at scale without relying solely on expensive interceptors.” AeroVironment says LOCUST engagements cost less than $10 per shot, a cost profile that differentiates directed energy from interceptor-based counter-UAS systems and removes the reload limits inherent to kinetic defense.
AeroVironment Stands Apart on Directed Energy Drone-sector peers Red Cat (NASDAQ:RCAT) and Kratos Defense & Security Solutions (NASDAQ:KTOS) sit in the same Department of War Drone Dominance and counter-UAS themes, yet AeroVironment carries a funded, contracted directed-energy franchise that sets it apart from listed rivals today. That’s why one international order reprices AeroVironment while Ondas and Red Cat trade heavy.
Kratos Defense & Security Solutions delivered its own strong quarter in early August, with Q2 2026 revenue of $458.8 million up 30.5% YoY, and raised full-year guidance to $1.75 billion to $1.81 billion. Red Cat reaffirmed its fiscal 2026 revenue target of $150 million to $180 million despite missing consensus on the top line. The theme is intact across the group, yet AeroVironment’s directed-energy production award gives it a category no listed peer currently owns.
The year-to-date picture provides the counterweight. AeroVironment stock is down 39% year to date (YTD), so today’s rally, while meaningful, leaves the broader drawdown largely intact. Kratos Defense & Security Solutions has faced similar pressure this year, and Unusual Machines has climbed sharply on the same policy tailwinds around NDAA-compliant domestic supply chains.
The macro backdrop remains supportive. The FY 2027 Department of War budget request allocates $53.6 billion to autonomous systems and an additional $20.6 billion across counter-drone and one-way attack programs, feeding directly into the pipelines at AeroVironment, Ondas, Red Cat, and Kratos Defense & Security Solutions. That funding envelope explains the sector’s structural bid even on lower-momentum days.
What to Watch The pivotal question is timing: how quickly AeroVironment’s funded backlog converts to revenue as Congress works through the fiscal 2027 defense budget. Investors can watch for signs that LOCUST production ramps at the Albuquerque facility and that additional international orders follow the initial commercial sale.
Given the size of today’s move against the YTD drawdown, investors may want to size their exposure to the directed-energy theme carefully rather than chase the initial pop. AeroVironment’s conference call commentary and any follow-on LOCUST announcements over the coming quarters could shape the next leg of the story. Management framed LOCUST as a potential half-a-billion-dollar-plus annual franchise over time, which sets a clear yardstick for how the setup evolves.
Contact [email protected] for any questions or corrections.
Jim Cramer publicly warned investors away from AeroVironment just one week before the drone and laser maker dropped a report that forced everyone to rethink the competition story he called too dangerous to touch.
On September 2, Jim Cramer told Mad Money viewers he was saying “not yet, not now” on AeroVironment (NASDAQ:AVAV | AVAV Price Prediction) because competition in its corner of defense was too strong. Seven days later, the drone and laser maker posted the biggest earnings beat it has produced in years.
I have been following defense-tech names for a while, and this is the kind of setup that punishes conviction on both sides. Shares walked into the report down 5% on the day and are down 39% year to date. Then the numbers hit.
Numbers That Blew Past the Bar Fiscal Q1 2027 adjusted EPS came in at $0.59 versus the $0.2479 consensus, a 138% surprise. Revenue of $480.49 million topped the $456.09 million estimate and grew 5.7% year over year. Bookings landed at roughly $700 million for a 1.4x book-to-bill, and funded backlog hit a record $1.50 billion, up 37% year over year.
CEO Wahid Nawabi said: “AV’s fiscal year 2027 is off to a strong start, with record first-quarter revenue and funded backlog and landmark strategic wins.”
The LOCUST Bet Gets Real Directed energy was the standout. AeroVironment landed a $464 million LOCUST award for the Army’s Enduring High Energy Laser program, which Nawabi called “the first ever production contract for direct energy systems in U.S. military history.” He said LOCUST fires at “under $10 per shot” and predicted the product line could become a “well over a half a billion dollar plus a year franchise” within roughly a year.
Compare that to Cramer’s competition worry. Nawabi said on the call that on the P550 reconnaissance program, “We’re essentially getting well over 80% of the dollars of those awards so far, maybe close to 90% of the awards.” The $117 million P550 win is part of what he expects to become a $1 billion program over the next few years.
Where the Caution Still Fits Cramer’s skepticism is not without evidence. GAAP net income remained a loss of $5.07 million. The Space, Cyber and Directed Energy segment fell 21% year over year to $134.52 million. Free cash flow was negative $36 million, and management reaffirmed rather than raised guidance of $2.125 billion to $2.225 billion in revenue with non-GAAP EPS of $3.02 to $3.34. Roughly 70% of non-GAAP EPS is back-half weighted, and Nawabi flagged uncertainty over “how fast can Congress approve the next fiscal year’s budget?”
Still, last quarter’s smaller 25% beat produced a 19% one-day jump. In pre-market Thursday, shares were quoted at $147.42. If you believed Cramer on September 2, the question now is whether the competition thesis survives a record backlog and the Army’s first production laser contract. If you did not, the record backlog says the turn may already be underway.
Contact [email protected] for any questions or corrections.
This year has been quite the rollercoaster ride for AeroVironment (AVAV -5.36%) investors. After spiking more than 60% to kick off 2026, the stock lost more than 64% of its value due to restated financials and the loss of a key contract.
Despite the obvious challenges, expectations were high heading into the defense company's quarterly financial report, and shareholders got what they were looking for. The results were a reminder that -- like the company's drones -- AeroVironment has further to fly.
Image source: The Motley Fool.
For the defenseAeroVironment delivered the results of its fiscal 2027 first quarter (ended Aug. 1), and that was a lot to like. The company generated record revenue, up 6% to $480.5 million, driven by strong sales in the autonomous systems segment. This drove adjusted diluted earnings per share (EPS) up 84% to $0.59.
For context, analysts' consensus estimates called for revenue of $456.1 million and adjusted EPS of $0.25, so AeroVironment sailed past expectations.
The automated systems (AxS) segment -- which includes drones -- grew 21% year over year to $346 million, while the space, cyber, and directed energy (SCDE) segment declined 21% to $134 million.
Other metrics confirmed the strength of its overall results. The company delivered bookings of $683 million, which jumped 71% year over year, resulting in a book-to-bill ratio of 1.4. AeroVironment also reported a record funded backlog of $1.5 billion, up 37% year over year and 23% sequentially. Its unfunded backlog -- which involves expected, but not obligated, future funding -- totaled $1.4 billion.
On Tuesday, the company secured its first international order for the LOCUST directed energy counter-drone system, valued at $50 million. This order came in the wake of AeroVironment's U.S. Army contract for $464.8 million for its Enduring-High Energy Laser (E-HEL) -- which marked the first-ever production contract for a high-energy laser weapons system in U.S. history. These were just two of several major contract wins during the quarter.
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What the future holdsManagement is optimistic about the future. AeroVironment maintained its full-year outlook, which calls for revenue in a range of $2.125 billion and $2.225 billion, representing 10% growth at the midpoint of its guidance. The company is also calling for adjusted diluted EPS of $3.16, or a decline of 4% at the midpoint. Management cited a planned facility and capacity expansion, which will increase its depreciation expense, as the reason for the lower profits.
AeroVironment's challenges from earlier this year have weighed on its stock price, while also making its valuation much more reasonable. The stock is selling for 44 times forward earnings and 32 times next year's expected earnings -- less than one-third their levels from earlier this year.
Wall Street is firmly onboard. Of the analysts who offered an opinion in September, 85% rate the stock a buy or strong buy, and none recommended selling -- and that was even before today's better-than-expected results.
To be clear, AeroVironment is a higher-risk, higher-reward stock, complete with lumpy sales, even lumpier profits, and extreme volatility. That said, the company's expanding product line and recent government contract wins highlight the potential for the drone-maker to take flight.
