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    The Bull Case For AeroVironment (AVAV) Could Change Following Major New U.S. Defense Contracts And Laser Deliveries

    Simply Wall St·12/21/2025 14:15:01
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    • In recent weeks, AeroVironment has reported sharply higher quarterly and half-year revenues, new earnings guidance for fiscal 2026, and multiple new U.S. defense and homeland security contracts, including a five-year US$874.26 million U.S. Army IDIQ for foreign military sales and a US$4.8 million award from the U.S. Coast Guard.
    • The successful delivery of high-energy laser weapon prototypes to the U.S. Army and fresh wins for its P550 UAS and maritime robotics underscore AeroVironment’s expanding role across unmanned systems, counter‑UAS, and directed‑energy programs for both U.S. and allied customers.
    • We’ll now look at how these laser weapon deliveries and new defense contracts may reinforce or challenge AeroVironment’s existing investment narrative.

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    AeroVironment Investment Narrative Recap

    To own AeroVironment, you need to believe in sustained demand for unmanned systems, counter‑UAS, and directed‑energy solutions, even as the company remains unprofitable and heavily tied to U.S. defense spending. The latest laser weapon deliveries and new contracts appear to support the near term revenue and backlog story, but do not resolve the key short term concern around pressured margins and ongoing net losses.

    Among the recent announcements, the five year, US$874.26 million U.S. Army IDIQ for foreign military sales looks most relevant, because it reinforces AeroVironment’s role as a key supplier of Groups 1 to 3 UAS and C‑UAS systems. Paired with AMP‑HEL laser prototypes and the Coast Guard robotics award, it adds to contract visibility around a core catalyst: expanding deployment of modular, interoperable platforms across U.S. and allied forces.

    Yet, despite these contract wins, investors should be aware that AeroVironment’s profitability remains under pressure as...

    Read the full narrative on AeroVironment (it's free!)

    AeroVironment's narrative projects $2.6 billion revenue and $264.5 million earnings by 2028.

    Uncover how AeroVironment's forecasts yield a $404.00 fair value, a 66% upside to its current price.

    Exploring Other Perspectives

    AVAV 1-Year Stock Price Chart
    AVAV 1-Year Stock Price Chart

    Eight Simply Wall St Community fair value estimates span roughly US$202 to US$404 per share, showing how far apart individual views can be. Against that backdrop, AeroVironment’s dependence on U.S. defense budgets and priorities gives these differing opinions real consequences for how you think about its future resilience.

    Explore 8 other fair value estimates on AeroVironment - why the stock might be worth 17% less than the current price!

    Build Your Own AeroVironment Narrative

    Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

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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.