AeroVironment (AVAV) AI Stock Analysis

• Market Cap: $12.28B
• Dividend Yield: N/A
• Average Volume (3M): 1.09M
• Price to Earnings (P/E): 159.3
• Beta (1Y): 1.35
• Revenue Growth: 14.50%
• EPS Growth: -29.76%
• Country: US
• Employees: 1,403
• Sector: Industrials
• Sector Strength: 76
• Industry: Aerospace & Defense
• EPS (TTM): 1.61
• Shares Outstanding: 49,932,230
• 10 Day Avg. Volume: 750,366
• 30 Day Avg. Volume: 1,090,029
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.35
• Enterprise Value/Revenue: 5.47
• Enterprise Value/Gross Profit: 13.59
• Enterprise Value/Ebitda: 72.15
• 1Y Price Target: $295.55
• Price Target Upside: 19.43% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 12

• Rating: 65 Neutral
• Price Target: $266.00 ▲(7.49% Upside)

AeroVironment's strong earnings call, highlighting record revenues and strategic acquisitions, is the most significant factor driving the score. However, high valuation metrics and cash flow challenges temper the overall outlook. The technical analysis presents a mixed picture, with the stock showing balanced momentum indicators.

Positive Factors

Contract Opportunities

AeroVironment is considered the favorite to win the LRR production contract, potentially representing a significant program of record.

Financial Flexibility

The refinancing gives AeroVironment, Inc. considerable financial flexibility with approximately $600 million in cash and only a $650 million 0% coupon convertible outstanding.

Valuation and Growth Potential

Investors are once again growing comfortable with the view that AeroVironment shares should be valued in line with Kratos, implying at least 30% upside.

Negative Factors

Investor Concerns

There was a tremendous amount of investor confusion regarding AeroVironment’s Ukraine exposure that led to a protracted sell-off.

Sales Outlook

Weaker than expected consolidated FY2026 sales and adj. EBITDA outlook, though management conservatism is assumed as the reason.

AeroVironment Business Overview & Revenue Model

Company Description

AeroVironment, Inc. (AVAV) is a leading technology company specializing in unmanned aircraft systems (UAS), tactical missile systems, and advanced solutions for the defense and commercial sectors. With a focus on innovative drone technology, AeroVironment designs and manufactures a range of products including small and medium-sized UAVs, such as the Raven, Wasp, and Puma systems, which are utilized by military and government customers worldwide. The company also offers services related to its products, including training, support, and maintenance, contributing to its reputation as a key player in the aerospace and defense industries.

How the Company Makes Money

AeroVironment 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 Financial Statement Overview

Summary

AeroVironment shows strong gross margins and a robust balance sheet with low leverage, indicating financial stability. However, cash flow challenges, particularly negative free cash flow, highlight inefficiencies in cash management. The company is on a positive trajectory but needs to improve cash flow efficiency 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.

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.

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.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	787.81M	692.72M	716.72M	540.54M	445.73M	394.91M
Gross Profit	316.93M	318.64M	283.93M	173.51M	141.24M	164.56M
EBITDA	59.68M	40.80M	102.50M	-79.08M	43.35M	54.24M
Net Income	43.62M	43.62M	59.67M	-173.71M	-8.77M	33.83M
Balance Sheet
Total Assets	1.12B	1.12B	1.02B	824.58M	914.20M	928.57M
Cash, Cash Equivalents and Short-Term Investments	40.86M	40.86M	73.30M	132.86M	101.95M	180.71M
Total Debt	64.29M	64.29M	59.68M	162.82M	216.57M	222.77M
Total Liabilities	234.06M	234.06M	193.12M	273.61M	305.99M	316.46M
Stockholders Equity	886.51M	886.51M	822.75M	550.97M	607.97M	612.09M
Cash Flow
Free Cash Flow	-13.69M	-1.32M	-9.19M	-3.47M	-31.91M	75.27M
Operating Cash Flow	-1.32M	-1.32M	15.29M	11.40M	-9.62M	86.53M
Investing Cash Flow	-28.49M	-28.49M	-51.71M	-7.00M	-52.29M	-378.77M
Financing Cash Flow	-2.86M	-2.86M	-22.85M	50.83M	-16.61M	194.16M

AeroVironment Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 247.47
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 247.47 is below the 20-day moving average (MA) of 250.03, below the 50-day MA of 249.87, and above the 200-day MA of 184.64, indicating a neutral trend. The MACD of -2.92 indicates Positive momentum. The RSI at 49.62 is Neutral, neither overbought nor oversold. The STOCH value of 62.60 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AVAV.

AeroVironment Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KRMN	70 Outperform	$7.24B	―		―	―	―
KTOS	68 Neutral	$11.49B	730.15	0.88%	―	7.76%	40.33%
AVAV	65 Neutral	$12.28B	159.32	5.10%	―	14.50%	-29.76%
Sector *	64 Neutral	$10.95B	16.37	8.81%	1.96%	2.68%	-15.33%
MRCY	63 Neutral	$4.05B	―	-2.57%	―	9.19%	72.88%
SPR	51 Neutral	$4.87B	―	81.63%	―	-2.60%	-94.76%
ACHR	49 Neutral	$5.98B	―	-60.83%	―	―	-4.00%

AeroVironment Corporate Events

AeroVironment Raises $126.3 Million Through Share Offering

On July 3, 2025, AeroVironment, Inc. completed a public offering of 3,528,226 shares at $248.00 per share, with an additional 529,234 shares sold on July 15, 2025, through an over-allotment option, raising approximately $126.3 million in net proceeds. This capital influx is expected to bolster the company’s financial position and potentially enhance its market competitiveness in the aerospace and defense sector.

AeroVironment Completes Stock and Convertible Notes Issuance

On July 1, 2025, AeroVironment, Inc. entered into agreements to issue and sell 3,528,226 shares of common stock and $747,500,000 of 0% Convertible Senior Notes due 2030. The issuance of these financial instruments was completed by July 3, 2025, with the notes governed by an indenture agreement. These financial moves are aimed at strengthening the company’s capital structure and may impact its market positioning by providing additional liquidity and flexibility for future operations.

AeroVironment Announces Public Offerings to Repay Loans

On May 1, 2025, AeroVironment, Inc. completed the acquisition of BlueHalo Financing Topco, LLC, utilizing a $700 million term loan and $225 million from its revolving credit facility to settle BlueHalo’s existing debts and transaction expenses. Subsequently, on June 30, 2025, AeroVironment announced plans for public offerings of $750 million in common stock and $600 million in convertible senior notes to repay the aforementioned loans and for general corporate purposes, though the completion of these offerings remains subject to market conditions.

AeroVironment Reports Record Q4 and FY 2025 Results

AeroVironment reported record financial results for the fourth quarter and fiscal year 2025, with a 40% increase in fourth-quarter revenue and a 14% rise in annual revenue. The company achieved significant growth in its Uncrewed Systems and Loitering Munition Systems, leading to record bookings of $1.2 billion. The acquisition of BlueHalo is expected to enhance AeroVironment’s position in the defense-technology sector, aligning with strategic priorities and expanding capabilities. Despite a goodwill impairment charge in the Uncrewed Ground Vehicle business, the company anticipates strong growth in fiscal year 2026, projecting revenue between $1.9 billion and $2.0 billion.

AeroVironment Highlights BlueHalo Acquisition at Conference

On June 3, 2025, AeroVironment, Inc. presented an overview of its business at the William Blair Annual Growth Stock Conference in Chicago. The company highlighted its recent acquisition of BlueHalo, which closed on May 1, 2025, and is expected to enhance revenue and market position. The acquisition is anticipated to provide significant synergies and strengthen AeroVironment’s portfolio of mission-critical capabilities, positioning it as a diversified defense technology provider. The company also outlined its strategic focus on expanding into new markets and maintaining its role as a market innovator, despite the inherent risks and uncertainties involved.