AeroVironment, Inc. (AVAV) - Stock Analysis
Last updated: Jan 19, 2026
Research Idea
Research content for general circulation. Not individualized advice.Ā Methodology & Disclosures
AeroVironment shows record Q1 revenue with 140% YoY growth boosted by BlueHalo acquisition, a $1.1B backlog, key defense contracts, strong sector tailwinds, and 61% share price rally over 3 weeks, backed by bullish technicals and analyst upgrades, making it a compelling hot idea despite margin and cash flow risks.
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AI Analyst Overview
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Valuation Metrics
Fundamental Analysis
Key Financial Insights: ā¢ Liquidity surge ā¢ Profitability collapse ā¢ Ongoing cash burn Company shows improved liquidity and low leverage but a sharp deterioration in profitabilityāquarterly loss, steep margin compression and persistent negative free cash flow despite higher cash balances.
Price Behavior
Key Price Behavior Insights: ā¢ Strong momentum ā¢ Higher highs ā¢ Rapid appreciation Support Level: $350 Resistance Level: $380 AVAV has staged a steep bullish rally over the last month from about $256 to $393, breaking $380 resistance with strong momentum but nearing overbought territory and vulnerable to a pullbackā
Sentiment & News
Key News Insights: ā¢ Revenue surge ā¢ Margin pressure ā¢ Legal scrutiny AeroVironment surged on strong revenue growth and defense contract wins but faces margin compression, execution risk, legal scrutiny, and insider selling amid heightened investor interest.
AI Summary
AeroVironment's transformation into a programādriven government prime after BlueHalo shifts the investment case from pure drone-unit growth to contract- and acquisition-dependent scaleāinvestors should tightly monitor consecutive adjusted gross margin improvement toward midā30s, the pace of funded backlog conversion and a return to positive FCF as the decisive execution signals.
Description
AeroVironment, Inc. designs, manufactures and supports a range of unmanned systems and related services delivered to U.S. government customers and allied international governments. Operating across unmanned aircraft, tactical missile, medium UAS and high-altitude pseudo-satellite businesses, the company supplies platforms, payloads, control systems, ground equipment and sustainment services. Founded in 1971, it is headquartered in Arlington, Virginia.
Idea History
| Date | Close | Ticker | Company | Summary | Status | P/L |
|---|---|---|---|---|---|---|
| Oct 13 | Oct 20 | AVAV | AeroVironment, Inc. | AeroVironment shows record Q1 revenue with 140% YoY growth boosted by BlueHalo acquisition, a $1.1B backlog, key defense contracts, strong sector tailwinds, and 61% share price rally over 3 weeks, backed by bullish technicals and analyst upgrades, making it a compelling hot idea despite margin and cash flow risks. | Closed | -11.2% |
| Jun 23 | Jun 30 | AVAV | AeroVironment, Inc. | AeroVironment has outperformed its sector recently and sits on a technical base around $180ā195 ahead of a June earnings release that could validate its strong profitability and revenue growth outlook. The BlueHalo merger adds a fresh growth narrative in drone defense, and the risk/reward looks favorable given the stockās low leverage and positive analyst sentiment. | Closed | +49.0% |