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AeroVironment (AVAV)
NASDAQ:AVAV
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AeroVironment
(NASDAQ:AVAV)
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Select Model
Rating:67Neutral
Price Target:
$327.00
▲(8.45% Upside)
AeroVironment's strong revenue growth and positive earnings call sentiment are offset by profitability challenges and a high valuation. The stock's technical indicators suggest strong momentum, but potential overbought conditions may pose risks.
Positive Factors
Revenue Growth
The significant revenue growth indicates strong demand for AeroVironment's products and services, enhancing its market position and potential for future expansion.
Strategic Partnerships
The partnership with NCSIST strengthens AeroVironment's international presence and opens new market opportunities, supporting long-term growth and diversification.
Innovative Product Development
Innovative product development like the HSOR payload enhances AeroVironment's competitive edge, offering advanced solutions that meet evolving market needs.
Negative Factors
Profitability Challenges
Ongoing profitability challenges, exacerbated by acquisition costs, may hinder AeroVironment's ability to reinvest in growth and maintain financial health.
Decreased Gross Margins
The decline in gross margins suggests pressure on pricing or cost increases, which could impact long-term profitability and competitive positioning.
Cash Flow Issues
Negative cash flows indicate inefficiencies in converting income into cash, potentially limiting AeroVironment's ability to fund operations and growth initiatives.
AeroVironment (AVAV) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$14.38B
Dividend YieldN/A
Average Volume (3M)999.99K
Price to Earnings (P/E)153.5
Beta (1Y)1.44
Revenue Growth44.04%
EPS Growth-129.81%
CountryUS
Employees1,403
SectorIndustrials
Sector Strength72
IndustryAerospace & Defense
Share Statistics
EPS (TTM)0.32
Shares Outstanding49,932,205
10 Day Avg. Volume1,481,292
30 Day Avg. Volume999,987
Financial Highlights & Ratios
PEG Ratio-3.38
Price to Book (P/B)4.79
Price to Sales (P/S)5.17
P/FCF Ratio-175.91
Enterprise Value/Market Cap0.86
Enterprise Value/Revenue11.36
Enterprise Value/Gross Profit36.65
Enterprise Value/Ebitda195.49
Forecast
1Y Price Target
$305.09Price Target Upside1.18% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering12
AeroVironment Business Overview & Revenue Model
Company DescriptionAeroVironment, Inc. designs, develops, produces, delivers, and supports a portfolio of robotic systems and related services for government agencies and businesses in the United States and internationally. It operates through four segments: Unmanned Aircraft Systems (UAS), Tactical Missile System (TMS), Medium Unmanned Aircraft Systems (MUAS), and High Altitude Pseudo-Satellite Systems (HAPS). The company supplies UAS, TMS, unmanned ground vehicle, and related services primarily to organizations within the U.S. Department of Defense and to international allied governments. It also designs, engineers, tools, and manufactures unmanned aerial and aircraft systems, including airborne platforms, payloads and payload integration, ground control systems, and ground support equipment and other items and services related to unmanned aircraft systems. In addition, the company offers small UAS products, including spare equipment, alternative payload modules, batteries, chargers, repair services, and customer support, as well as multiple aircraft, hand-held ground control system, and spare parts and accessories. Further, it develops high-altitude pseudo-satellite UAS systems. The company was incorporated in 1971 and is headquartered in Arlington, Virginia.
How the Company Makes MoneyAeroVironment generates revenue primarily through the sale of its unmanned aircraft systems and tactical missile systems to government and commercial customers. The company has a diverse revenue model that includes product sales, service contracts, and recurring revenue from maintenance and support services. Key revenue streams include direct sales of UAS and accessories, training services for military personnel, and long-term contracts with defense agencies. Significant partnerships, including collaborations with the U.S. Department of Defense and other international military organizations, enhance its earnings potential through sustained demand for advanced drone technology and tactical solutions.
AeroVironment Key Performance Indicators (KPIs)
Any
Revenue by Type
Breaks down income by different revenue streams, offering insight into the company's business model and potential areas for expansion or vulnerability.
Breaks down income by different revenue streams, offering insight into the company's business model and potential areas for expansion or vulnerability.
Data provided by:
Main Street Data
Main Street DataAeroVironment Earnings Call Summary
Earnings Call Date:Sep 09, 2025
(Q1-2026)
| % Change Since: |
Next Earnings Date:Dec 09, 2025
Earnings Call Sentiment Positive
AeroVironment started the fiscal year with record revenue and strong bookings, driven by strategic acquisitions and innovative product introductions. Despite challenges such as decreased gross margins and a reported net loss due to acquisition-related expenses, the company maintains a positive outlook with its robust pipeline and maintained guidance. The highlights significantly outweigh the lowlights, indicating strong growth potential.Q1-2026 Updates
Positive Updates
Record First Quarter Revenue
AeroVironment achieved a record first quarter with revenue of nearly $455 million, representing a 140% increase over the prior year and an 18% increase on a pro forma basis.
Strong Bookings and Backlog
Bookings for the first quarter reached nearly $400 million, with a funded backlog of $1.1 billion and an unfunded backlog of $3.1 billion.
Innovative Product Introductions
Introduced several innovative solutions in Counter UAS, space communications, and direct energy, which align with customers' urgent priorities and represent multibillion-dollar market opportunities.
Successful Integration of Blue Halo
The acquisition of Blue Halo has created significant new growth opportunities, with integration efforts progressing ahead of plan.
Key Contract Wins
Announced a $240 million award for laser communications terminals and a $95 million contract for the Freedom Eagle One program with the US Army.
Positive Financial Guidance
Maintained fiscal year 2026 guidance with revenue between $1.9 billion and $2 billion.
Negative Updates
Decreased Gross Margins
Consolidated GAAP gross margins decreased to 21% from 43% in the prior year due to a higher service mix and increased non-cash accounting expenses.
Net Loss Reported
Reported a net loss of $57.4 million for the first quarter, compared to net income of $21.2 million in the same period last year, primarily due to acquisition-related expenses.
High Operating Expenses
Reported GAAP SG&A for the quarter was $131.3 million, significantly higher than $33.8 million in the prior year, largely due to the Blue Halo acquisition.
Company Guidance
During AeroVironment's first quarter fiscal year 2026 earnings call, the company reported record revenue of nearly $455 million and bookings of almost $400 million, with a funded backlog growing to $1.1 billion and an unfunded backlog of $3.1 billion. The fiscal year 2026 revenue guidance was maintained between $1.9 billion and $2 billion. Key achievements included a $240 million contract for long-haul space laser communications terminals and a $95 million contract for the Freedom Eagle One missile program. The company also introduced the AeroVironment Halo software platform and highlighted its expanded capabilities following the Blue Halo acquisition. AeroVironment emphasized its strong positioning for growth across several multibillion-dollar market opportunities, including counter UAS, space communications, and directed energy solutions.AeroVironment Financial Statement Overview
Summary
AeroVironment shows a strong gross profit margin and a robust balance sheet with low leverage, indicating financial stability. However, the company faces challenges with cash flow management, as evidenced by negative free cash flow, which needs improvement to sustain growth.Income Statement
AeroVironment has shown fluctuating revenue growth over the years, with a significant increase from 2022 to 2023. The gross profit margin for the latest year stands at around 46%, which is strong for the industry, indicating effective cost management. However, the net profit margin is relatively low at approximately 6.3%, reflecting higher operating and financing costs. The company has struggled with consistent profitability, as seen in the past negative net incomes, but recent improvements in EBIT and EBITDA margins show a positive trend towards operational efficiency.65
Positive
Balance Sheet
The company maintains a strong equity position with an equity ratio of approximately 79%, indicating a solid financial foundation with low leverage. The debt-to-equity ratio is low at around 0.04, which suggests a conservative approach to debt financing. Return on Equity (ROE) for the latest year is approximately 4.9%, which, while positive, indicates room for improvement in generating returns from equity. The balance sheet reflects stability and a low-risk profile in terms of financial leverage.70
Positive
Cash Flow
The cash flow situation presents challenges, with a negative free cash flow in the latest year due to negative operating cash flow. This indicates potential issues in converting revenue into cash. The free cash flow to net income ratio is negative, highlighting inefficiencies in cash generation relative to reported profits. However, the past positive operating cash flow years show potential for recovery if operational adjustments are made.55
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.09B | 820.63M | 716.72M | 540.54M | 445.73M | 394.91M |
| Gross Profit | 336.59M | 322.94M | 283.93M | 173.51M | 141.24M | 164.56M |
| EBITDA | 63.11M | 82.85M | 102.50M | -79.08M | 43.35M | 54.24M |
| Net Income | -44.92M | 43.62M | 59.67M | -173.71M | -8.77M | 33.83M |
Balance Sheet | ||||||
| Total Assets | 5.62B | 1.12B | 1.02B | 824.58M | 914.20M | 928.57M |
| Cash, Cash Equivalents and Short-Term Investments | 685.80M | 40.86M | 73.30M | 132.86M | 101.95M | 180.71M |
| Total Debt | 829.71M | 64.29M | 59.68M | 162.82M | 216.57M | 222.77M |
| Total Liabilities | 1.20B | 234.06M | 193.12M | 273.61M | 305.99M | 316.46M |
| Stockholders Equity | 4.43B | 886.51M | 822.75M | 550.97M | 607.97M | 612.09M |
Cash Flow | ||||||
| Free Cash Flow | -183.06M | -24.13M | -9.19M | -3.47M | -31.91M | 75.27M |
| Operating Cash Flow | -153.40M | -1.32M | 15.29M | 11.40M | -9.62M | 86.53M |
| Investing Cash Flow | -898.52M | -28.49M | -51.71M | -7.00M | -52.29M | -378.77M |
| Financing Cash Flow | 1.66B | -2.86M | -22.85M | 50.83M | -16.61M | 194.16M |
AeroVironment Technical Analysis
Positive
301.52
Price Trends
256.82
Positive
227.67
Positive
189.56
Positive
Market Momentum
12.56
Negative
73.78
Negative
95.00
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AVAV, the sentiment is Positive. The current price of 301.52 is above the 20-day moving average (MA) of 255.39, above the 50-day MA of 256.82, and above the 200-day MA of 189.56, indicating a bullish trend. The MACD of 12.56 indicates Negative momentum. The RSI at 73.78 is Negative, neither overbought nor oversold. The STOCH value of 95.00 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AVAV.
AeroVironment Risk Analysis
AeroVironment disclosed 67 risk factors in its most recent earnings report. AeroVironment reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
AeroVironment Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | 11.32B | 46.32 | 8.33% | 0.63% | 11.43% | 32.31% | |
68 Neutral | 13.70B | 871.03 | 0.74% | ― | 7.76% | 40.33% | |
67 Neutral | $14.38B | 153.50 | -1.70% | ― | 44.04% | -129.81% | |
64 Neutral | 8.76B | 65.93 | 0.46% | ― | 16.09% | ― | |
63 Neutral | 4.45B | -113.84 | -2.57% | ― | 9.19% | 72.88% | |
63 Neutral | 8.85B | ― | 6.48% | ― | ― | ― | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
Performance Comparison
AVAV
AeroVironment
301.52
106.82
54.86%
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.