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Is AeroVironment Becoming a Broader Defense Technology Platform?
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Key Takeaways
AeroVironment's AxS revenues rose 21% to $346 million, led by higher UAS sales and funded R&D.
AVAV secured $464 million for Enduring High Energy Laser, its first directed-energy production contract.
The BlueHalo and ESAero acquisitions expanded AVAV's autonomous, space and defense technology portfolio.
AeroVironment’s (AVAV - Free Report) Autonomous Systems (“AxS”) business is emerging as an important contributor to the company’s growth. In the first quarter of fiscal 2027, AxS revenues increased 21% year over year to $346 million, driven by higher UAS product sales and increased customer-funded R&D. UAS revenues alone rose 71% to $120 million, reflecting what the company described as increased global demand for UAS products.
AeroVironment is increasingly operating across more than traditional drone systems. Its two reporting segments are Autonomous Systems and Space, and Cyber and Directed Energy, with the latter covering space platforms, cyber capabilities and directed-energy technologies such as high-energy lasers.
The acquisition of BlueHalo in May 2025 significantly expanded this portfolio, incorporating capabilities into both AxS and SCDE. AVAV also acquired ESAero in March 2026, adding a producer of UAS and advanced air-mobility platforms to the Autonomous Systems segment.
This broader portfolio is also producing new contract opportunities. During first-quarter fiscal 2027, AVAV secured its first international commercial order for its LOCUST laser weapon system and received a $464 million Army contract for the Enduring High Energy Laser program — the company’s first directed-energy production contract. It also received a $43 million contract to integrate its PANTHER phased-array antenna onto SkyRange platforms for hypersonic telemetry.
Government customers also remain central to the business: U.S. government revenues represented about $387 million of first-quarter revenues, compared with approximately $94 million from non-U.S. government customers.
Along with AVAV, a few other companies are also benefiting from the same trend, as discussed below:
Kratos Defense & Security Solutions (KTOS - Free Report) : KTOS develops technologies spanning unmanned systems, satellite communications, cyber, missile defense, hypersonics and directed energy, giving it exposure to several of the same defense technology themes as AeroVironment.
Red Cat Holdings (RCAT - Free Report) : Red Cat focuses on unmanned and robotic systems for defense and national security, with its portfolio spanning small UAS and uncrewed surface vessels. The company also has a development partnership with AeroVironment involving Red Cat’s FANG drone and AV’s P550 UAS.
AVAV Stock’s Earnings Estimates
The Zacks Consensus Estimate for fiscal 2027 earnings per share indicates a year-over-year decline of 1.81%.
Image Source: Zacks Investment Research
AVAV Stock Trades at a Discount
In terms of valuation, ATRO’s forward 12-month price-to-sales (P/S) is 3.41X, a discount to the industry’s average of 7.14X.
Image Source: Zacks Investment Research
AVAV Stock’s Price Performance
In the past three months, the company’s shares have lost 8% compared with the industry’s 20.4% decline.
View the Zacks #1 Rank List
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Is AeroVironment Becoming a Broader Defense Technology Platform?
Key Takeaways
AeroVironment’s (AVAV - Free Report) Autonomous Systems (“AxS”) business is emerging as an important contributor to the company’s growth. In the first quarter of fiscal 2027, AxS revenues increased 21% year over year to $346 million, driven by higher UAS product sales and increased customer-funded R&D. UAS revenues alone rose 71% to $120 million, reflecting what the company described as increased global demand for UAS products.
AeroVironment is increasingly operating across more than traditional drone systems. Its two reporting segments are Autonomous Systems and Space, and Cyber and Directed Energy, with the latter covering space platforms, cyber capabilities and directed-energy technologies such as high-energy lasers.
The acquisition of BlueHalo in May 2025 significantly expanded this portfolio, incorporating capabilities into both AxS and SCDE. AVAV also acquired ESAero in March 2026, adding a producer of UAS and advanced air-mobility platforms to the Autonomous Systems segment.
This broader portfolio is also producing new contract opportunities. During first-quarter fiscal 2027, AVAV secured its first international commercial order for its LOCUST laser weapon system and received a $464 million Army contract for the Enduring High Energy Laser program — the company’s first directed-energy production contract. It also received a $43 million contract to integrate its PANTHER phased-array antenna onto SkyRange platforms for hypersonic telemetry.
Government customers also remain central to the business: U.S. government revenues represented about $387 million of first-quarter revenues, compared with approximately $94 million from non-U.S. government customers.
Companies Leveraging Autonomous & Defense Technology Demand
Along with AVAV, a few other companies are also benefiting from the same trend, as discussed below:
Kratos Defense & Security Solutions (KTOS - Free Report) : KTOS develops technologies spanning unmanned systems, satellite communications, cyber, missile defense, hypersonics and directed energy, giving it exposure to several of the same defense technology themes as AeroVironment.
Red Cat Holdings (RCAT - Free Report) : Red Cat focuses on unmanned and robotic systems for defense and national security, with its portfolio spanning small UAS and uncrewed surface vessels. The company also has a development partnership with AeroVironment involving Red Cat’s FANG drone and AV’s P550 UAS.
AVAV Stock’s Earnings Estimates
The Zacks Consensus Estimate for fiscal 2027 earnings per share indicates a year-over-year decline of 1.81%.
Image Source: Zacks Investment Research
AVAV Stock Trades at a Discount
In terms of valuation, ATRO’s forward 12-month price-to-sales (P/S) is 3.41X, a discount to the industry’s average of 7.14X.
Image Source: Zacks Investment Research
AVAV Stock’s Price Performance
In the past three months, the company’s shares have lost 8% compared with the industry’s 20.4% decline.
Image Source: Zacks Investment Research
AVAV’s Zacks Rank
The company currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.