Buy Rating Reaffirmed on AeroVironment: Temporary SCAR and LASSO Headwinds Amid Strong Long-Term Defense Program Positioning

William Blair analyst Louie DiPalma has maintained their bullish stance on AVAV stock, giving a Buy rating today.

Louie DiPalma has given his Buy rating due to a combination of factors tied to AeroVironment’s positioning in key U.S. defense programs and the temporary nature of current headwinds. He notes that, despite the stock pulling back after a competitor’s announcement on the Army’s LASSO program and a Space Force stop order on the $1.7 billion SCAR contract, AeroVironment is still likely to secure a LASSO award alongside other vendors based on recent discussions with Army contracting officials. He also emphasizes that the SCAR program is expected to restart once it is converted from a cost-plus structure to a fixed-price contract, which aligns with the Department of War’s broader move toward fixed-price agreements and should mainly result in timing shifts rather than permanent revenue loss.
At the same time, DiPalma highlights that AeroVironment’s multibeam BADGER antenna technology is a core element of the Space Force’s Golden Dome initiative, underscoring the strategic importance of the SCAR program. He estimates SCAR currently represents roughly $150 million in annual sales and views the pause as a near-term revenue drag rather than a structural issue. Additionally, he points out that the U.S. is backing a broad portfolio of loitering munitions across multiple vendors and systems, with AeroVironment supplying several key platforms in this category, which supports a favorable long-term growth outlook. In his view, the combination of likely LASSO participation, eventual SCAR resumption, and strong positioning in high-profile missile and space programs justifies a positive stance on the shares despite short-term volatility.

In another report released today, BTIG also maintained a Buy rating on the stock with a $415.00 price target.