AeroVironment (AVAV) Could Be 44% Undervalued Following Its Germany Drone Order

AeroVironment (AVAV) is back in focus after Germany’s Bundeswehr, working through NATO’s procurement agency, awarded the company a US$30.9 million order for next generation Puma unmanned aircraft systems and support.

See our latest analysis for AeroVironment.

Even with new contracts such as the US$30.9 million Puma order from Germany and the US$80.5 million Titan MS delivery under the US$500 million Domestic Shield program, AeroVironment’s recent share price momentum has been weak. The stock is down 14.6% on a 30 day share price return and 38.4% year to date, while the 5 year total shareholder return of 65.3% shows a very different longer term picture.

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Bulls see AeroVironment’s contracts and long term targets as mispriced after the recent share price slide, while bears point to the current losses and softer momentum. Which side does the valuation work seem to support?

Most Popular Narrative: 43.6% Undervalued

AeroVironment’s most followed narrative assigns a fair value of $280 per share, which is well above the last close at $157.78, and frames the stock as a focused way to play unmanned defense technology.

The bull case for AVAV isn't just about drones, it’s about ubiquity. In 20th-century warfare, air superiority required multi-million dollar jets and years of pilot training. In 2026, air superiority is increasingly defined by "low cost" systems, cheap, smart, and expendable.

Read the complete narrative.

The narrative leans heavily on a shift from low volume development work to higher margin manufacturing, supported by ambitious production goals and profit assumptions that look more like high growth tech than a traditional contractor. Want to see how those expectations for revenue, margins, and future earnings are combined to reach that $280 fair value, and what needs to happen for that target to hold up?

Result: Fair Value of $280 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, AeroVironment’s narrative could be challenged if defense budgets shift away from unmanned systems, or if integration of BlueHalo and new platforms proves slower than expected.

Find out about the key risks to this AeroVironment narrative.

Another View: AeroVironment Through a Sales Multiple Lens

That $280 fair value for AeroVironment is built on a detailed narrative, but the market is also pricing the stock at around 4x sales. That is cheaper than the Aerospace and Defense industry at 5.3x and below peers at 5.7x, yet still above a fair ratio of 2.9x that the market could move toward. Does that mix of relative discount and fair ratio premium point to opportunity or valuation risk if sentiment changes?

To see what the numbers say about this price in more detail, have a look at the full valuation breakdown through the See what the numbers say about this price — find out in our valuation breakdown..

Next Steps

Mixed views on AeroVironment so far? Take a moment to review the full picture for yourself, including the 1 key reward and 1 important warning sign.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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