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Other industry players, such as Rocket Lab USA, Inc. (RKLB - Free Report) and Curtiss-Wright Corp. (CW - Free Report) , have also delivered a similar stellar performance in the past month. Shares of RKLB and CW have risen 41.5% and 12.4%, respectively, in the said period.
With AVAV’s strong recent gains, some investors may want to buy the stock quickly. However, it’s important to check if the company’s fundamentals can support long-term growth or if the rise is only short-term. Understanding AVAV’s growth outlook and risks is key to making an informed decision.
What Pushed Up AVAV Stock?
AVAV’s share gains over the past month seem to be supported by its strong quarterly revenues, strategic partnership and some notable contract wins, which together contributed to its investors’ optimism. The company released its first-quarter fiscal 2026 results in early September, wherein it reported solid revenue growth of 140%, on the back of which its gross profit margin surged an impressive 17%.
Following this, AVAV received a contract from the U.S. Space Force’s Space Rapid Capabilities Office to deliver two BADGER phased array antenna systems as part of the Satellite Communication Augmentation Resource program.
In the same month, AVAV signed a Memorandum of Understanding with Taiwan’s National Chung-Shan Institute of Science and Technology to collaborate on autonomous systems and technologies aimed at strengthening Taiwan’s defense and security capabilities.
In October, AeroVironment clinched a $499 million contract from the U.S. Air Force Research Laboratory for the High-Performance Electromagnetic Spectrum Survivable Materials Advancement program. The project focuses on developing advanced materials and protective technologies to shield warfighters from harmful electromagnetic radiation.
Growth Prospects for AVAV Stock
AeroVironment looks well-positioned for steady growth in the coming years, driven by its expanding role in defense, space and autonomous technology. The company has a strong presence in unmanned aircraft systems, tactical missile systems and high-altitude platforms, giving it a solid base in both U.S. and international defense markets. Rising global demand for surveillance, reconnaissance and advanced communications solutions, amid growing geopolitical tensions worldwide, is expected to support its performance.
Its Autonomous Systems segment develops unmanned aircraft systems, tactical missile systems and high-altitude platforms, providing solutions for surveillance, reconnaissance and defense missions. The Space, Cyber and Directed Energy segment focuses on advanced sensors, satellite communications and space-based technologies to support modern defense and security operations. Both segments continue to drive AeroVironment’s overall performance, reflecting its growing expertise across traditional and emerging defense markets.
AeroVironment also achieved a record first-quarter backlog of $1.1 billion for fiscal 2026, providing strong visibility for future projects and revenues. With ongoing innovation, strategic acquisitions like that of BlueHalo, a diversified portfolio and a robust contract pipeline, the company is well-positioned to sustain its growth momentum and deliver long-term value to shareholders. Notably, BlueHalo contributed $123.7 million in product revenues and $111.5 million in service revenues, highlighting its significant role in supporting the company’s growth across key business areas.
Let’s check below how the company is expected to perform in the near term.
AVAV’s Estimates
The Zacks Consensus Estimate for AVAV’s fiscal 2026 sales implies year-over-year growth of 145.5%, while that for fiscal 2027 sales indicates an improvement of 15.2%. The consensus mark for its annual earnings also reflects similar growth trends.
Image Source: Zacks Investment Research
Further, the upward revision in its near-term earnings estimates (except for fiscal 2027) over the past 60 days suggests investors’ increasing confidence in this stock’s earnings generation capabilities.
Image Source: Zacks Investment Research
Valuation
In terms of valuation, AVAV’s forward 12-month price-to-earnings (P/E) is 101.93X, a premium to the industry average of 51.41X. This suggests that investors will be paying a higher price than the company's expected earnings growth compared with its industry average.
Image Source: Zacks Investment Research
Risks to Consider Before Choosing AVAV
AeroVironment faces some industry-specific challenges that could affect its operations. Labor shortages may slow production, delay contract deliveries and make it harder for the company to deliver products in time.
Supply-chain issues are another concern, as limited access to certain components can also disrupt manufacturing, increase costs and affect the timely delivery of systems. Its industry peers RKLB and CW also face similar production and supply constraints.
These challenges are important for investors to consider, as they could impact the company’s performance in the near term despite its strong backlog and growth potential.
Should You Buy AVAV Stock Now?
Considering AeroVironment’s premium valuation compared with its industry, investors interested in this stock should wait for a better entry point. However, given the company’s strong growth potential, supported by rising earnings estimates and a robust backlog, current shareholders may consider holding the stock.
Image: Bigstock
AVAV Outperforms Industry Over the Past Month: Should You Buy the Stock?
Key Takeaways
Shares of AeroVironment, Inc. (AVAV - Free Report) have surged 65% in the past month, outperforming both the Zacks Aerospace-Defense Equipment industry’s growth of 8.3% and the broader Zacks Aerospace sector’s gain of 6%. It also came above the S&P 500’s return of 2.8% in the same time frame.
Image Source: Zacks Investment Research
Other industry players, such as Rocket Lab USA, Inc. (RKLB - Free Report) and Curtiss-Wright Corp. (CW - Free Report) , have also delivered a similar stellar performance in the past month. Shares of RKLB and CW have risen 41.5% and 12.4%, respectively, in the said period.
With AVAV’s strong recent gains, some investors may want to buy the stock quickly. However, it’s important to check if the company’s fundamentals can support long-term growth or if the rise is only short-term. Understanding AVAV’s growth outlook and risks is key to making an informed decision.
What Pushed Up AVAV Stock?
AVAV’s share gains over the past month seem to be supported by its strong quarterly revenues, strategic partnership and some notable contract wins, which together contributed to its investors’ optimism. The company released its first-quarter fiscal 2026 results in early September, wherein it reported solid revenue growth of 140%, on the back of which its gross profit margin surged an impressive 17%.
Following this, AVAV received a contract from the U.S. Space Force’s Space Rapid Capabilities Office to deliver two BADGER phased array antenna systems as part of the Satellite Communication Augmentation Resource program.
In the same month, AVAV signed a Memorandum of Understanding with Taiwan’s National Chung-Shan Institute of Science and Technology to collaborate on autonomous systems and technologies aimed at strengthening Taiwan’s defense and security capabilities.
In October, AeroVironment clinched a $499 million contract from the U.S. Air Force Research Laboratory for the High-Performance Electromagnetic Spectrum Survivable Materials Advancement program. The project focuses on developing advanced materials and protective technologies to shield warfighters from harmful electromagnetic radiation.
Growth Prospects for AVAV Stock
AeroVironment looks well-positioned for steady growth in the coming years, driven by its expanding role in defense, space and autonomous technology. The company has a strong presence in unmanned aircraft systems, tactical missile systems and high-altitude platforms, giving it a solid base in both U.S. and international defense markets. Rising global demand for surveillance, reconnaissance and advanced communications solutions, amid growing geopolitical tensions worldwide, is expected to support its performance.
Its Autonomous Systems segment develops unmanned aircraft systems, tactical missile systems and high-altitude platforms, providing solutions for surveillance, reconnaissance and defense missions. The Space, Cyber and Directed Energy segment focuses on advanced sensors, satellite communications and space-based technologies to support modern defense and security operations. Both segments continue to drive AeroVironment’s overall performance, reflecting its growing expertise across traditional and emerging defense markets.
AeroVironment also achieved a record first-quarter backlog of $1.1 billion for fiscal 2026, providing strong visibility for future projects and revenues. With ongoing innovation, strategic acquisitions like that of BlueHalo, a diversified portfolio and a robust contract pipeline, the company is well-positioned to sustain its growth momentum and deliver long-term value to shareholders. Notably, BlueHalo contributed $123.7 million in product revenues and $111.5 million in service revenues, highlighting its significant role in supporting the company’s growth across key business areas.
Let’s check below how the company is expected to perform in the near term.
AVAV’s Estimates
The Zacks Consensus Estimate for AVAV’s fiscal 2026 sales implies year-over-year growth of 145.5%, while that for fiscal 2027 sales indicates an improvement of 15.2%. The consensus mark for its annual earnings also reflects similar growth trends.
Image Source: Zacks Investment Research
Further, the upward revision in its near-term earnings estimates (except for fiscal 2027) over the past 60 days suggests investors’ increasing confidence in this stock’s earnings generation capabilities.
Image Source: Zacks Investment Research
Valuation
In terms of valuation, AVAV’s forward 12-month price-to-earnings (P/E) is 101.93X, a premium to the industry average of 51.41X. This suggests that investors will be paying a higher price than the company's expected earnings growth compared with its industry average.
Image Source: Zacks Investment Research
Risks to Consider Before Choosing AVAV
AeroVironment faces some industry-specific challenges that could affect its operations. Labor shortages may slow production, delay contract deliveries and make it harder for the company to deliver products in time.
Supply-chain issues are another concern, as limited access to certain components can also disrupt manufacturing, increase costs and affect the timely delivery of systems. Its industry peers RKLB and CW also face similar production and supply constraints.
These challenges are important for investors to consider, as they could impact the company’s performance in the near term despite its strong backlog and growth potential.
Should You Buy AVAV Stock Now?
Considering AeroVironment’s premium valuation compared with its industry, investors interested in this stock should wait for a better entry point. However, given the company’s strong growth potential, supported by rising earnings estimates and a robust backlog, current shareholders may consider holding the stock.
AVAV currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.