AeroVironment (AVAV) AI Stock Analysis

• Market Cap: $10.78B
• Dividend Yield: N/A
• Average Volume (3M): 2.03M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.86
• Revenue Growth: 79.89%
• EPS Growth: -171.81%
• Country: US
• Employees: 1,403
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 0.64
• Shares Outstanding: 49,933,994
• 10 Day Avg. Volume: 2,707,463
• 30 Day Avg. Volume: 2,025,309
• 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 Cap: 1.05
• Enterprise Value/Revenue: 7.01
• Enterprise Value/Gross Profit: 32.15
• Enterprise Value/Ebitda: 79.23
• 1Y Price Target: $303.00
• Price Target Upside: 40.38% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 15
• EPS Forecast (FY): 2.95
• Revenue Forecast (FY): $1.91B

• Rating: 53 Neutral
• Price Target: $215.00 ▼(-0.39% Downside)
• Action: Reiterated Date: 03/17/26
• Date: Action: Reiterated 03/17/26

The score is held back primarily by weak TTM profitability and negative cash flow, alongside a bearish technical trend with the stock trading below key moving averages. These are partially offset by a strong earnings-call setup (raised revenue guidance, record bookings/backlog visibility) and supportive strategic moves like the ESAero acquisition, though program disruption and margin pressure remain key risks.

Positive Factors

Backlog & Bookings

Large, recent contract awards and a funded plus sizable unfunded backlog provide durable revenue visibility and production planning optionality. High bookings support multi-quarter delivery schedules, help secure supplier capacity, and underpin guidance and near-term cash conversion when funded.

Manufacturing & M&A Expansion

Integrating ESAero broadens in-house prototyping and manufacturing, accelerating design-to-production cycles. Strengthened propulsion and AS9100-certified capacity is a structural advantage for scaling production, reducing outsourcing risk and supporting long-term program wins and margin improvement potential.

Conservative Leverage

A low debt-to-equity ratio provides financial flexibility to fund scale-up, absorb one-time costs, and pursue strategic investments. Manageable leverage reduces refinancing risk and supports sustained investment in capacity, R&D, and program fulfillment despite near-term operating losses.

Negative Factors

Margin Deterioration

Sharp margin compression and a large net loss reflect structural cost pressures, mix shifts to lower-margin services, and one-time charges. Persistently low margins erode free cash flow generation and challenge reinvestment capacity unless product mix, pricing, or cost structure is improved.

Negative Cash Generation

Sustained negative operating and free cash flow indicate the business is consuming cash to operate and grow. This reduces runway for R&D and capital expenditure, increases reliance on external financing, and raises execution risk if bookings convert slower than expected or working capital needs rise.

Program Execution Risk

Government-driven stop-work and contract termination led to large impairments and highlight execution and contract-structure risk. Shifts to firm-fixed-price terms and renegotiations can materially affect margins, create timing uncertainty for revenue, and raise the potential for future program losses.

AeroVironment Business Overview & Revenue Model

Company Description

AeroVironment, 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 Money

AeroVironment makes money primarily by selling uncrewed systems and providing related support to government customers, with revenue largely generated through contracts (including multi-year and program-based procurements) tied to defense budgets and operational demand. Key revenue streams include: 1) Product sales (core): Revenue comes from delivering hardware systems—such as small UAS (air vehicles, payloads, ground control stations, antennas/communications links, and spares) and loitering munition systems—typically sold as complete systems and replenishment items. Contracts may be structured as firm-fixed-price or other government contracting formats; revenue is recognized as systems are delivered and accepted (exact accounting treatment varies by contract). 2) Services and sustainment: The company also earns revenue from training, field service representatives, maintenance/repair, upgrades, logistics support, and software/firmware enhancements. These activities can be bundled with initial system purchases or sold separately over the life of deployed fleets, creating recurring aftermarket revenue tied to installed base utilization. 3) Contract-funded development and engineering: AeroVironment can receive funding for research, development, test and evaluation (RDT&E), engineering services, prototyping, and integration work under government contracts. These programs can lead to future production awards if systems transition from development to procurement. 4) International and allied government sales: In addition to the U.S. Department of Defense, AeroVironment sells to allied nations and partners, subject to export controls and foreign military sales/direct commercial sales frameworks. International demand can materially influence quarterly results depending on the timing and scale of awards and deliveries. Significant factors affecting earnings include the timing of contract awards and delivery schedules, U.S. and allied defense spending priorities, operational consumption rates (which can drive replenishment demand for certain systems), manufacturing capacity and supply-chain execution, and regulatory/export-approval processes for international sales. Specific partnerships are null.

AeroVironment Financial Statement Overview

Summary

Revenue is growing (TTM +8.0%), but profitability deteriorated sharply (gross margin ~8.8%, net margin ~-18.8%) and cash generation is weak with negative operating cash flow and free cash flow. The balance sheet is a relative strength with manageable leverage (debt-to-equity ~0.19), but current losses and cash burn elevate execution risk.

Income Statement

TTM (Trailing-Twelve-Months) results show solid top-line growth (revenue up 8.0%), but profitability deteriorated sharply: gross margin fell to ~8.8% and net margin turned deeply negative (~-18.8%) with a sizeable net loss. This is a meaningful reversal from FY2024–FY2025, when margins were healthy and the company was profitable, suggesting elevated costs, mix shift, or one-time charges are pressuring earnings.

Balance Sheet

Leverage looks manageable in TTM (Trailing-Twelve-Months) with debt-to-equity around 0.19, indicating the company is not heavily debt-funded. However, returns have weakened (negative return on equity in TTM), reflecting that current losses are eroding shareholder value even with a relatively conservative capital structure.

Cash Flow

TTM (Trailing-Twelve-Months) cash generation is weak: operating cash flow and free cash flow are both negative, and free cash flow declined further (down ~11.8%). While free cash flow is roughly in line with net income in TTM (both negative), the core issue is that the business is consuming cash, a notable step down from FY2021 and inconsistent results in FY2022–FY2025.

Breakdown	TTM	Apr 2025	Apr 2024	Apr 2023	Apr 2022	Apr 2021
Income Statement
Total Revenue	1.61B	820.63M	716.72M	540.54M	445.73M	394.91M
Gross Profit	351.34M	322.94M	283.93M	173.51M	141.24M	164.56M
EBITDA	142.56M	104.39M	109.45M	61.20M	51.88M	69.54M
Net Income	-224.36M	43.62M	59.67M	-176.21M	-4.19M	23.33M
Balance Sheet
Total Assets	5.45B	1.12B	1.02B	824.58M	914.20M	928.57M
Cash, Cash Equivalents and Short-Term Investments	587.14M	40.86M	73.30M	132.86M	101.95M	180.71M
Total Debt	826.01M	64.29M	59.68M	162.82M	216.57M	222.77M
Total Liabilities	1.18B	234.06M	193.12M	273.61M	305.99M	316.46M
Stockholders Equity	4.27B	886.51M	822.75M	550.97M	607.97M	612.09M
Cash Flow
Free Cash Flow	-195.30M	-24.13M	-9.19M	-3.47M	-31.91M	75.27M
Operating Cash Flow	-174.18M	-1.32M	15.29M	11.40M	-9.62M	86.53M
Investing Cash Flow	-1.24B	-28.49M	-51.71M	-7.00M	-52.29M	-378.77M
Financing Cash Flow	1.65B	-2.86M	-22.85M	50.83M	-16.61M	194.16M

AeroVironment Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 215.85
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AVAV, the sentiment is Negative. The current price of 215.85 is below the 20-day moving average (MA) of 233.81, below the 50-day MA of 275.32, and below the 200-day MA of 275.47, indicating a bearish trend. The MACD of -15.33 indicates Negative momentum. The RSI at 41.23 is Neutral, neither overbought nor oversold. The STOCH value of 47.46 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AVAV.

AeroVironment Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DRS	76 Outperform	$12.35B	32.53	10.54%	1.04%	12.27%	33.16%
KRMN	67 Neutral	$13.42B	312.46	3.55%	―	―	―
SARO	64 Neutral	$9.03B	33.96	10.88%	―	17.79%	815.80%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
MRCY	55 Neutral	$4.74B	-73.03	-2.08%	―	8.63%	72.72%
AVAV	53 Neutral	$10.78B	-21.68	-6.41%	―	79.89%	-171.81%
KTOS	51 Neutral	$17.38B	606.55	1.20%	―	14.00%	23.78%

AeroVironment Corporate Events

AeroVironment Completes ESAero Acquisition to Expand Defense Capabilities

On March 16, 2026, AeroVironment, Inc. completed the approximately $200 million acquisition of Empirical Systems Aerospace, Inc., paying roughly $160 million in stock and the remainder in cash, with the deal subject to customary adjustments. ESAero, a leading UAS and advanced air mobility platform producer with AS9100-certified facilities in San Luis Obispo, now becomes a wholly owned subsidiary within AeroVironment’s Precision Strike and Defense Systems group under the Loitering Munition Systems business unit.

The transaction is expected to be accretive to adjusted EBITDA in the first year after closing and is intended to enhance AeroVironment’s ability to move rapidly from conceptual design to advanced manufacturing. By adding ESAero’s electric and hybrid propulsion expertise, rapid prototyping capabilities and large-scale manufacturing footprint, the deal strengthens AeroVironment’s positioning as a global defense tech leader, following its $4.1 billion BlueHalo acquisition in May 2025 and signaling an ongoing strategy of integrating specialized innovation hubs into a unified capability suite for government and industry customers.

The most recent analyst rating on (AVAV) stock is a Buy with a $388.00 price target. To see the full list of analyst forecasts on AeroVironment stock, see the AVAV Stock Forecast page.

AeroVironment Addresses SCAR Termination and Future Opportunities

AeroVironment reported fiscal third-quarter 2026 results on March 10, 2026, with revenue surging 143% year over year to $408 million and nine-month revenue reaching $1.3 billion, driven in part by the BlueHalo acquisition and strong demand across its Autonomous Systems and Space, Cyber and Directed Energy segments. Despite record funded backlog of $1.1 billion and robust bookings, the company posted a net loss of $156.6 million, largely due to a $151.3 million goodwill impairment in its Space unit following a January 2026 stop-work order on the BADGER phased array antenna agreement for the Space Force SCAR program and higher non-cash purchase accounting expenses.

On March 10, 2026, the U.S. Government told AeroVironment during SCAR program negotiations that it intends to terminate the BADGER agreement for convenience but will allow the company to compete for future SCAR work, prompting AeroVironment to continue investing in BADGER by developing a commercial phased array antenna product. While these developments weighed on margins and earnings in the quarter, non-GAAP adjusted EBITDA improved to $44.5 million and management highlighted strong order flow, manufacturing scale-up and a record backlog as positioning the company for a strong fourth quarter and a solid start to fiscal 2027, with significant implications for long-term defense market opportunities and shareholder value.

The most recent analyst rating on (AVAV) stock is a Hold with a $225.00 price target. To see the full list of analyst forecasts on AeroVironment stock, see the AVAV Stock Forecast page.

AeroVironment Adopts New Executive Deferred Compensation Plan

On February 27, 2026, AeroVironment’s Compensation Committee approved a Non-Qualified Deferred Compensation Plan, effective March 1, 2026, for certain key employees, named executive officers and non-employee directors. The plan allows employees to defer up to 75% of base salary and all or part of cash bonuses, while directors may defer cash board fees and equity grants.

Distributions will generally be made in lump sums or installments depending on retirement status and prior elections, with immediate 100% vesting of deferrals and earnings but no company matching contributions. The unfunded plan, to be supported by a rabbi trust whose assets remain subject to company creditors, aligns with ERISA and Section 409A and reflects a move to enhance executive compensation flexibility, while concentrating credit risk on AeroVironment’s financial stability for participating stakeholders.

Also on February 27, 2026, the committee approved Trace Stevenson, President, Autonomous Systems, and Mary Clum, President, Space, Cyber & Directed Energy, as participants in the company’s Executive Severance Plan. This expands severance protection for two key business leaders, potentially aiding retention and signaling the strategic importance of their roles in AeroVironment’s growth areas.

The most recent analyst rating on (AVAV) stock is a Hold with a $227.00 price target. To see the full list of analyst forecasts on AeroVironment stock, see the AVAV Stock Forecast page.

AeroVironment Announces CFO Retirement and Transition Plan

On February 18, 2026, AeroVironment Executive Vice President and Chief Financial Officer Kevin McDonnell notified the company of his decision to retire effective July 31, 2026, and on February 20, 2026, he entered into a retirement agreement setting the terms of his departure. Under the agreement, McDonnell will remain CFO until a successor starts or until his retirement date, then, if replaced earlier, continue in a non-officer role to support an orderly transition while receiving his current salary, a full fiscal 2026 target bonus, certain COBRA-related payments and continued vesting of existing equity awards through his retirement, in return for a general release of claims and reaffirmation of confidentiality obligations.

The planned retirement and structured transition arrangement are designed to maintain financial leadership stability at AeroVironment while the board recruits a new CFO, limiting disruption to ongoing operations and preserving continuity for investors and other stakeholders.

The most recent analyst rating on (AVAV) stock is a Hold with a $288.00 price target. To see the full list of analyst forecasts on AeroVironment stock, see the AVAV Stock Forecast page.

AeroVironment Faces Stop Work Order, Renegotiates SCAR Deal

On January 16, 2026, the U.S. Government, in mutual agreement with AeroVironment, issued a stop work order on the company’s Other Transaction Agreement for delivery of BADGER phased array antenna systems under the Satellite Communication Augmentation Resource (SCAR) program, pausing current work while the parties negotiate an amended agreement aligned with new program requirements. The revised arrangement is expected to shift to a firm-fixed-price structure, signaling a move toward tighter cost controls and clearer risk allocation, and AeroVironment indicated it expects to continue supplying capabilities and products for SCAR, suggesting the program remains strategically important despite the interim disruption to contract execution.

The most recent analyst rating on (AVAV) stock is a Hold with a $366.00 price target. To see the full list of analyst forecasts on AeroVironment stock, see the AVAV Stock Forecast page.

AeroVironment Expands Operations with Long-Term Utah Facility Lease

On December 18, 2025, AeroVironment, Inc. signed a long-term lease for approximately 130,733 square feet of space at 4387 West 2100 South in West Valley City, Utah, with base monthly rent starting at $146,420.96 and escalating through the 126-month term, and with the company also responsible for a proportionate share of operating expenses such as property taxes. The lease includes two options to extend the term for additional five-year periods at then-current market rents (but not less than the final month’s base rent), indicating a significant and potentially enduring expansion of AeroVironment’s operational footprint that could support future growth and capacity needs in its defense and unmanned systems business.

The most recent analyst rating on (AVAV) stock is a Buy with a $285.00 price target. To see the full list of analyst forecasts on AeroVironment stock, see the AVAV Stock Forecast page.