Airo Group Holdings, Inc. (AIRO) AI Stock Analysis

• Market Cap: $366.25M
• Dividend Yield: N/A
• Average Volume (3M): 724.43K
• Price to Earnings (P/E): ―
• Beta (1Y): 3.03
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: US
• Employees: 151
• Sector: Technology
• Sector Strength: 88
• Industry: Aerospace & Defense
• EPS (TTM): -0.28
• Shares Outstanding: 31,303,835
• 10 Day Avg. Volume: 578,898
• 30 Day Avg. Volume: 724,430
• PEG Ratio: -0.80
• Price to Book (P/B): 1.09
• Price to Sales (P/S): 6.87
• P/FCF Ratio: 28.86
• Enterprise Value/Market Cap: 0.78
• Enterprise Value/Revenue: 0.05
• Enterprise Value/Gross Profit: 0.10
• Enterprise Value/Ebitda: -0.05
• 1Y Price Target: $19.67
• Price Target Upside: 73.27% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): -0.55
• Revenue Forecast (FY): $133.75M

• Rating: 56 Neutral
• Price Target: $12.50 ▲(10.13% Upside)

The score is primarily supported by strong revenue growth and a solid, low-leverage balance sheet, but is held back by continuing profitability losses and weakened free cash flow. Technicals are mixed (near-term strength vs. negative MACD and below the 100-day average), and valuation is challenged by a negative P/E with no dividend support.

Positive Factors

Strong revenue growth and high gross margin

Airo's 253% revenue surge alongside a 67% gross margin indicates robust product-market fit and scalable revenue generation. High gross margins create durable operating leverage, enabling reinvestment in R&D and capacity to pursue long-term contracts while improving prospects for future profitability.

Low financial leverage

A very low debt-to-equity ratio provides strong financial flexibility, allowing the company to fund capital expenditure, ramp manufacturing, or pursue acquisitions with limited refinancing risk. This conservatism supports resilience across defense procurement cycles and strategic investing.

Domestic manufacturing capability for RQ-35

Bringing RQ-35 production to full operational standard in a U.S. facility establishes domestic manufacturing and supply-chain resilience, improving eligibility for U.S. defense contracts. This structural capability can support recurring program revenues and scale for multi-year government programs.

Negative Factors

Persistent profitability losses

Despite top-line growth, sustained negative net profit and EBIT margins show the company has not converted revenue into operating profitability. Continued losses can erode equity, limit reinvestment capacity, and necessitate external funding, undermining long-term financial sustainability.

Declining free cash flow

A marked drop in free cash flow growth reduces the firm's ability to self-finance operations, R&D, and capital expenditures. Even with positive operating cash flow to net income, falling free cash flow raises refinancing or dilution risks and constrains strategic flexibility over the medium term.

Negative return on equity

Negative ROE indicates shareholder capital is not generating returns, signaling capital inefficiency. Over months, this can pressure management to seek dilutive financing, cut growth investments, or restructure operations, all of which can impair long-term value creation for investors.

Airo Group Holdings, Inc. Business Overview & Revenue Model

Company Description

AIRO Group is a U.S.-based aerospace and defense company headquartered in Albuquerque, NM. It operates across four segments: drones, avionics, pilot training, and electric air mobility (eVTOL), with products like AI-enabled Sky Watch surveillance drones.

How the Company Makes Money

Airo Group Holdings generates revenue through multiple streams, including the sale of UAVs and related technology solutions to government and commercial customers. The company also earns income from contracts with defense and aerospace agencies, providing research and development services, as well as manufacturing capabilities for specialized components. Strategic partnerships with other technology firms and government entities further bolster its revenue, enabling Airo to participate in larger projects and secure long-term contracts. Additionally, ongoing maintenance and support services for its products contribute to a recurring revenue model.

Airo Group Holdings, Inc. Financial Statement Overview

Summary

Strong top-line momentum (253% revenue growth) and a high gross margin (67%) support the score, but ongoing losses (negative net profit/EBIT margins) and only middling cash-flow quality (free cash flow decline) keep it from rating higher.

Income Statement

Airo Group Holdings, Inc. has shown impressive revenue growth, with a 253% increase in the latest year. However, profitability remains a challenge, as indicated by negative net profit and EBIT margins. The gross profit margin is strong at 67%, suggesting efficient cost management, but the company needs to improve its bottom line.

Balance Sheet

The company maintains a healthy debt-to-equity ratio of 0.09, indicating low leverage and financial stability. However, the return on equity is negative, reflecting ongoing profitability challenges. The equity ratio is solid, suggesting a strong capital structure.

Cash Flow

Cash flow management is mixed, with a significant decline in free cash flow growth. The operating cash flow to net income ratio is positive, indicating some efficiency in converting income to cash, but the overall cash flow position needs improvement.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	6.36B	86.94M	43.25M	17.08M	11.78M
Gross Profit	2.84B	58.32M	24.91M	4.13M	3.48M
EBITDA	-5.36B	-2.27M	-14.78M	-23.10M	-16.07M
Net Income	-7.96B	-38.69M	-32.46M	-25.55M	-20.53M
Balance Sheet
Total Assets	774.58M	701.00M	737.52M	733.34M	9.78M
Cash, Cash Equivalents and Short-Term Investments	83.68M	20.74M	4.12M	605.15K	13.62K
Total Debt	14.68M	48.96M	30.97M	30.73M	33.35M
Total Liabilities	35.03M	152.27M	142.07M	110.35M	116.02M
Stockholders Equity	739.55M	548.73M	595.46M	623.00M	-106.24M
Cash Flow
Free Cash Flow	-14.83M	20.70M	21.27M	-5.41M	-574.09K
Operating Cash Flow	-12.58M	21.49M	22.11M	-5.33M	-535.06K
Investing Cash Flow	-2.25M	-789.13K	-835.92K	923.65K	-39.04K
Financing Cash Flow	88.24M	-10.58M	-9.29M	4.75M	505.20K

Airo Group Holdings, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
AIRO	56 Neutral	$366.25M	-134.16	―	―	―	―
VSA	51 Neutral	$2.02M	―	―	―	―	―
KPLT	48 Neutral	$31.16M	-1.11	―	―	16.56%	28.25%
WATT	45 Neutral	$15.01M	-0.43	-175.08%	―	599.15%	82.47%
UAVS	45 Neutral	$53.13M	―	-110.92%	―	-6.34%	98.60%
SURG	44 Neutral	$29.99M	-0.59	-313.72%	―	-39.75%	-89.61%