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1. Company Snapshot

1.a. 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.

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1.b. Last Insights on AVAV

Breaking News: AeroVironment Inc reported no recent earnings release however several updates were provided. The company is set to announce Q2 earnings with Wall Street forecasts being analyzed. AeroVironment presented at the Goldman Sachs Industrials and Materials Conference. Additionally, the company expanded its Puma Visual Navigation System to Puma LE, enhancing navigation capabilities. AeroVironment is considered a key drone-tech pick for 2026 along with COHR and TRMB due to strong growth outlooks. Based on the information I would recommend a buy.

1.c. Company Highlights

2. AeroVironment's Strong Q1 FY2026 Earnings Driven by Blue Halo Acquisition

AeroVironment reported a robust first quarter of fiscal year 2026, with revenues reaching $454.9 million, a significant increase from $296.7 million in the same period last year. The integration of Blue Halo contributed $137.4 million to the revenue, driving the overall growth. Adjusted EBITDA for the quarter was $78.6 million, up from $50.4 million in the prior year, reflecting synergies and increased revenue. Non-GAAP adjusted earnings per diluted share came in at $0.32, slightly below estimates of $0.3274. The company's gross margins are expected to improve throughout the year, ending in the mid-30s by Q4 FY2026.

Publication Date: Sep -09

📋 Highlights
  • Revenue Surge:: Q1 revenue hit $454.9M (+140% YoY), with Blue Halo contributing $137.4M.
  • EBITDA Growth:: Adjusted EBITDA rose to $78.6M (+56% YoY), projecting 16% of full-year revenue.
  • Backlog Strength:: Funded backlog reached $1.1B, while unfunded backlog stood at $3.1B.
  • Software Expansion:: Launch of HALO, a hardware-agnostic AI-driven platform for integrated C5ISR and autonomous systems.
  • Funding & Guidance:: Raised $1.5B via equity/debt, reaffirming FY2026 revenue guidance of $1.9B–$2B (+15% pro forma).

Segment Performance

The Autonomous Systems segment generated $285 million in revenue, driven by strong growth in products like Switchblade 600, Jump 20, and Titan. The Space, Cyber, and Directed Energy segment achieved $169 million in revenue, with significant contributions from Badger satellite ground stations, LOCUST directed energy counter UAS systems, and advanced R&D businesses. The company's diversified manufacturing footprint across 12 states and a strong installed base of over 42,000 platforms deployed globally position it well for future growth.

Guidance and Outlook

AeroVironment maintains its full-year revenue guidance of $1.9 billion to $2 billion for fiscal 2026, a 15% growth over pro forma fiscal 2025. The company has an 82% visibility to the midpoint of the revenue range, indicating strong customer demand and a robust backlog. The funding opportunities exist across AeroVironment's product portfolio, including drones, loitering munitions, counter-UAS solutions, lasers, software, space laser communications, phased arrays, and electronic warfare systems.

Valuation Metrics

With a P/E Ratio of 148.64, P/B Ratio of 7.31, and P/S Ratio of 14.64, AeroVironment's valuation multiples indicate a premium pricing. The EV/EBITDA ratio of 193.66 suggests that the company's enterprise value is significantly higher than its EBITDA. The ROE of 5.06% and ROIC of 4.16% indicate a relatively low return on equity and invested capital, respectively. Analysts estimate next year's revenue growth at 153.4%, which may justify some of the premium valuation multiples.

Key Takeaways

The key highlights from the earnings call include significant program wins, the launch of AeroVironment HALO, a hardware-agnostic software platform, and expanding partnerships with major defense contractors. The company's directed energy LOCUS laser system requires 15 to 20 kilowatts of power, significantly less than competing systems, and has been successfully installed on a JLTV for the U.S. Army.

3. NewsRoom

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Countdown to AeroVironment (AVAV) Q2 Earnings: Wall Street Forecasts for Key Metrics

Dec -04

Source: zacks.com

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Buy 3 Drone Technology Stocks to Enhance Your Portfolio Returns in 2026

Dec -04

Source: zacks.com

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AeroVironment Expands Puma™ Visual Navigation System (VNS) Kit to Puma LE

Dec -04

Source: businesswire.com

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AeroVironment, Inc. (AVAV) Presents at Goldman Sachs Industrials and Materials Conference 2025 Transcript

Dec -04

Source: seekingalpha.com

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All You Need to Know About AeroVironment (AVAV) Rating Upgrade to Buy

Dec -03

Source: zacks.com

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Hoverfly Whitelisted on AeroVironment's Command and Control Software Ecosystem

Dec -03

Source: prnewswire.com

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AeroVironment (AVAV) Reports Next Week: Wall Street Expects Earnings Growth

Dec -02

Source: zacks.com

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AeroVironment Announces Expansion of AV_Halo™ Unified Software Platform with CORTEX and MENTOR

Dec -02

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (12.12%)

6. Segments

Small Unmanned Aircraft Systems

Expected Growth: 15%

AeroVironment's Small Unmanned Aircraft Systems' 15% growth is driven by increasing adoption in military and commercial markets, rising demand for surveillance and reconnaissance capabilities, and growing need for efficient and cost-effective solutions. Additionally, advancements in drone technology, expanding use cases in agriculture, infrastructure inspection, and public safety, and strategic partnerships and contracts also contribute to the growth.

Tactical Missile Systems

Expected Growth: 10%

AeroVironment's Tactical Missile Systems growth is driven by increasing demand for unmanned aerial systems, rising adoption of loitering munitions, and growing need for precision strike capabilities. Additionally, the company's focus on innovation, expanding international sales, and strategic partnerships contribute to its 10% growth.

All Other

Expected Growth: 8%

AeroVironment's All Other segment growth is driven by increasing adoption of its electric vehicle charging solutions, expansion of its PosiCharge industrial electric vehicle charging business, and growing demand for its unmanned aerial systems (UAS) from international customers, resulting in an 8% growth rate.

Medium Unmanned Aircraft Systems

Expected Growth: 13%

AeroVironment's Medium Unmanned Aircraft Systems' 13% growth is driven by increasing adoption in military and commercial markets, advancements in autonomous technology, and rising demand for surveillance and reconnaissance capabilities. Government contracts, foreign military sales, and expansion into new geographies also contribute to growth.

7. Detailed Products

Raven

A small unmanned aerial vehicle (UAV) designed for military and commercial use, providing real-time video and photographic reconnaissance.

Puma

A small, portable, and rugged UAV designed for military and commercial use, providing real-time video and photographic reconnaissance.

Wasp

A small, lightweight, and portable UAV designed for military and commercial use, providing real-time video and photographic reconnaissance.

Quantix

A hybrid vertical takeoff and landing (VTOL) UAV designed for commercial use, providing real-time video and photographic reconnaissance.

EV Charging Solutions

A range of electric vehicle (EV) charging solutions designed for commercial and residential use, providing fast and efficient charging.

TurboCord

A portable and compact EV charging cable designed for Level 1 and Level 2 charging.

8. AeroVironment, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

AeroVironment, Inc. faces moderate threat from substitutes due to the presence of alternative solutions in the unmanned aircraft systems (UAS) market.

Bargaining Power Of Customers

AeroVironment, Inc. has a diverse customer base, including the US military and commercial customers, which reduces the bargaining power of individual customers.

Bargaining Power Of Suppliers

AeroVironment, Inc. relies on a few key suppliers for components and materials, which gives them some bargaining power, but the company's size and reputation help mitigate this risk.

Threat Of New Entrants

The UAS market is rapidly evolving, and new entrants with innovative technologies and business models pose a significant threat to AeroVironment, Inc.'s market share.

Intensity Of Rivalry

The UAS market is highly competitive, with several established players and new entrants vying for market share, leading to intense rivalry among competitors.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 22.81%
Debt Cost 6.12%
Equity Weight 77.19%
Equity Cost 6.12%
WACC 6.12%
Leverage 29.55%

11. Quality Control: AeroVironment, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Spirit AeroSystems

A-Score: 5.1/10

Value: 9.6

Growth: 1.1

Quality: 5.2

Yield: 0.0

Momentum: 7.5

Volatility: 7.3

1-Year Total Return ->

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Stock-Card
Leonardo DRS

A-Score: 4.6/10

Value: 2.0

Growth: 3.7

Quality: 6.2

Yield: 1.0

Momentum: 9.5

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
AeroVironment

A-Score: 4.5/10

Value: 4.4

Growth: 6.2

Quality: 4.7

Yield: 0.0

Momentum: 9.0

Volatility: 2.7

1-Year Total Return ->

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Stock-Card
AAR

A-Score: 4.4/10

Value: 4.5

Growth: 4.9

Quality: 3.1

Yield: 0.0

Momentum: 8.5

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
Kratos Defense

A-Score: 4.2/10

Value: 2.2

Growth: 5.2

Quality: 4.3

Yield: 0.0

Momentum: 10.0

Volatility: 3.3

1-Year Total Return ->

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Stock-Card
Hexcel

A-Score: 4.1/10

Value: 1.5

Growth: 4.3

Quality: 4.3

Yield: 1.0

Momentum: 6.0

Volatility: 7.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

278.39$

Current Price

278.39$

Potential

-0.00%

Expected Cash-Flows