AI Consensus Investment Thesis
AeroVironment (AVAV) Stock Forecast and AI Rating
Forecast targets and rating
Final recommendation
BUY
Calculated from the frozen synthesized path using the same return, horizon, volatility and dividend rules as individual opinions.
1-Year
BUY$181
+13.3%5-Year
BUY$291
+82.1%Latest flagship insight
Autonomous Warfare Monopoly Faces Capital Intensity Test Before Converting Backlog
There is high consensus that surging demand for attritable loitering munitions and directed energy guarantees robust top-line growth. However, sharp divergence surrounds whether heavy facility capital expenditure, acquired service margin dilution, and convertible debt settlement will constrain shareholder cash returns.
This is the latest published deep-analysis batch. Audit published forecasts in full transparency
Machiavelli (Insider), Universal Investor (Polymath), Superintelligence (Anthropologist), Warren Buffett (Value Purist), Elon Musk (Visionary), Ray Dalio (Strategist), Sherlock Holmes (Whistleblower), J.P. Morgan (Titan), Michael Burry (Vulture). Some archetypes run in multiple modes, resulting in 14 advisors total.
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If you invested $10,000 in AeroVironment today: $18,207 in five years versus $13,892 for S&P 500 benchmark.
20-quarter synthesized forecastPrice targets, quarterly returns and the reasoning behind each stepView tableClose table
Frozen forecast from 18 Sept 2026. Prices in USD; returns exclude dividends. Each quarter is compounded from the previous quarter.
Swipe the table horizontally to read every column.
| Quarter / date | Target (USD) | Quarter return | Total return | Forecast rationale |
|---|---|---|---|---|
| Q118 Dec 2026 | 159.72 | -0.15% | -0.15% | Sponsor equity lock-up releases introduce secondary supply friction, while elevated interest rates constrain speculative multiples. Solid Switchblade replenishment deliveries provide fundamental support, keeping quarterly price action tightly muted. |
| Q218 Mar 2027 | 166.42 | +4.19% | +4.04% | Federal defense appropriations resolve, releasing funded task orders across tactical loitering systems. Initial production on the LOCUST laser program narrows segment operating losses, generating modest valuation multiple stabilization. |
| Q318 Jun 2027 | 173.10 | +4.02% | +8.22% | Fiscal 2027 closes meeting revenue guidance near 2.18 billion dollars. The final sponsor lock-up tranche expires, clearing an overhang as factory expansion progresses toward initial operational capability. |
| Q418 Sept 2027 | 181.21 | +4.68% | +13.29% | Commissioning of expanded assembly capacity accelerates Switchblade throughput. Positive operating cash flow emerges alongside declining acquisition amortization, prompting institutional accumulation across high-conviction defense portfolios. |
| Q518 Dec 2027 | 187.91 | +3.70% | +17.48% | DoD Replicator and LASSO tranches convert into formal delivery task orders. Accelerating production volume absorbs overhead, though ongoing capital outlays keep free cash conversion relatively modest. |
| Q618 Mar 2028 | 196.36 | +4.50% | +22.76% | Foreign Military Sales expand as NATO allies expedite attritable UAS procurement. High-margin export deliveries lift blended product margins, supporting steady equity advance despite elevated macro benchmark yields. |
| Q718 Jun 2028 | 205.43 | +4.62% | +28.43% | Fiscal 2028 reports confirm revenue surpassing 2.4 billion dollars alongside positive GAAP operating margins. Reduced transaction amortization clarifies cash generation, driving disciplined multiple expansion across institutional accounts. |
| Q818 Sept 2028 | 210.91 | +2.67% | +31.86% | Directed-energy air-defense systems achieve operational certifications, driving follow-on task orders. Operating leverage broadens, though the approaching convert redemption window prompts measured trading sentiment. |
| Q918 Dec 2028 | 217.69 | +3.21% | +36.10% | Layered counter-UAS contracts scale across domestic military bases. Expanding service and sustainment revenues improve earnings visibility, insulating financial performance from routine federal budget authorization friction. |
| Q1018 Mar 2029 | 225.00 | +3.36% | +40.67% | Autonomous swarming software deployments across fielded platforms enhance unit pricing power. Software-enabled mission kits widen gross profit margins, supporting steady mid-single-digit equity appreciation. |
| Q1118 Jun 2029 | 231.82 | +3.03% | +44.93% | Fiscal 2029 closes with robust double-digit EBITDA margins and positive annual free cash flow. Peak facility investments conclude, allowing manufacturing cash generation to begin compounding predictably. |
| Q1218 Sept 2029 | 237.99 | +2.66% | +48.79% | The unified manufacturing campus reaches full commercial operation, reducing capital intensity. Improving cash-flow yields re-anchor valuation debates, attracting fundamental long-term growth-at-reasonable-price capital. |
| Q1318 Dec 2029 | 245.33 | +3.09% | +53.38% | Budget reconciliation debates introduce temporary contract timing friction. However, deep backlog visibility and recurring drone fleet sustainment billings prevent meaningful multiple compression during year-end trading. |
| Q1418 Mar 2030 | 252.41 | +2.88% | +57.81% | Management executes proactive liquidity planning for the maturing convertible debt. Operating cash flows support principal settlement without emergency equity dilution, removing a multi-year balance-sheet concern. |
| Q1518 Jun 2030 | 261.16 | +3.47% | +63.27% | Fiscal 2030 confirms enterprise revenues crossing 2.8 billion dollars. High factory utilization across loitering strike and directed-energy platforms delivers strong cash flow, sustaining steady market compounding. |
| Q1618 Sept 2030 | 264.50 | +1.28% | +65.37% | International co-production partnerships in Europe expand deliveries while lowering logistics overhead. Export volumes cushion domestic budget normalization, supporting measured share price gains near multi-year highs. |
| Q1718 Dec 2030 | 271.49 | +2.64% | +69.73% | Competitive bidding from venture-backed autonomy entrants exerts selective pricing pressure on low-tier tactical airframes. Proprietary counter-UAS and laser suites defend overall profitability, keeping performance stable. |
| Q1818 Mar 2031 | 277.97 | +2.39% | +73.79% | Next-generation collaborative combat air architectures transition into funded production lines. Expanding high-barrier defense franchises provide durable multi-year cash flow visibility, supporting orderly price appreciation. |
| Q1918 Jun 2031 | 284.88 | +2.49% | +78.11% | Fiscal 2031 financial reporting showcases normalized operating cash flow exceeding 300 million dollars. Proven multi-domain integration establishes the business as a mature defense-technology compounder. |
| Q2018 Sept 2031 | 291.22 | +2.22% | +82.07% | Terminal forecast period reflects an established defense prime valuation on diversified autonomous warfare franchises. Pristine operational liquidity and recurring programmatic contracts support solid long-term equity compounding. |
AeroVironment presents a structural tension between indisputable battlefield doctrine and demanding capital allocationcapital allocationThe decision process for directing capital among operations, investment, acquisitions, debt repayment, dividends, and share repurchases.View full glossary entry reality. Demand is verified by a 1.5 billion dollar funded backlogbacklogThe total value of signed contracts yet to be fulfilled, representing future revenue visibility.View full glossary entry and sovereign budget prioritization of attritable autonomous systemsautonomous systemsMachines or software that perceive conditions and act with limited direct human control.View full glossary entry. However, transformative consolidation has diluted share count by over sixty percent, loaded 747.5 million dollars in zero-coupon convertible debtconvertible debtDebt instruments convertible into equity, impacting balance sheet risk and potential shareholder dilution.View full glossary entry due 2030, and expanded low-margin service revenue. Furthermore, capital expenditurescapital expenditureCapital expenditure (CAPEX) is spending on long-lived assets or major improvements expected to support operations over multiple periods.View full glossary entry running at 12 to 14 percent of revenue consume roughly nine-tenths of guided adjusted EBITDAadjusted ebitdaEBITDA modified to exclude selected items that management considers non-recurring or not representative of ongoing operations.View full glossary entry, deferring meaningful free cash conversion through fiscal 2028. With the enterprise trading near 25 times forward , current multiples fully discount near-term defense growth, leaving valuation vulnerable to execution delays or rate-driven discount pressure.
Key insights
- Operating leverageoperating leverageThe sensitivity of operating profit to changes in revenue caused by the mix of fixed and variable costs.View full glossary entry depends on high-margin loitering munition hardware outgrowing acquired cost-plus services, as consolidated gross marginsgross marginsThe percentage of revenue remaining after deducting the direct costs of producing goods sold.View full glossary entry face structural drag.
- Near-term free cash flowfree cash flowFree cash flow (FCF) is cash generated after operating expenses and capital expenditures that remains available for debt reduction, reinvestment, or shareholder returns.View full glossary entry remains negligible until modern facility buildouts conclude, making shareholder value creation back-loaded into 2029 and beyond.
- Settling the 2030 convertible notes requires substantial operating cash accumulation, turning debt maturity into a critical equity overhang test.
AeroVironment is a leading manufacturer of military drones and counter-drone laser systems. Rising global defense spending has filled its order books with a record 1.5 billion dollars in funded government contracts. However, the company recently carried out a massive merger that issued millions of new shares and created heavy non-cash accounting losses. Management is currently spending nearly all available cash on building large new automated factories, leaving little free cash flowfree cash flowFree cash flow (FCF) is cash generated after operating expenses and capital expenditures that remains available for debt reduction, reinvestment, or shareholder returns.View full glossary entry today. Investors must balance strong military demand against heavy construction costs and debt due in 2030.
Key insights
- Heavy factory investments will consume most company profits until major manufacturing expansions finish around 2028.
- The company makes less profit on defense services than on selling hardware, which keeps overall profit marginsprofit marginsProfit margins measure the share of revenue retained as profit after covering specified costs, expressed as a percentage.View full glossary entry lower.
- Nearly 750 million dollars in debt must be settled by 2030, requiring strong future cash generation.
Deep Dive
Outside market consensus treats the company as the premier pure-play listed winner in autonomous drone warfare, anchoring on a 2.8 billion dollar total backlogbacklogThe total value of signed contracts yet to be fulfilled, representing future revenue visibility.View full glossary entry and substantial implied upside from sell-side targets. Mainstream commentary presumes that trailing GAAP net losses represent harmless non-cash accounting noise that will effortlessly convert into surging cash flow once post-merger integration concludes.
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Deep Dive
Alpha Gap & Repricing Catalysts
Where does the current market narrative diverge from our AI Opinions—and what could close the gap?
Market Narrative
What does the market currently expect? Outside market consensus treats the company as the premier pure-play listed winner in autonomous drone warfare, anchoring on a 2.8 billion dollar total backlogbacklogThe total value of signed contracts yet to be fulfilled, representing future revenue visibility.View full glossary entry and substantial implied upside from sell-side targets. Mainstream commentary presumes that trailing GAAP net losses represent harmless non-cash accounting noise that will effortlessly convert into surging cash flow once post-merger integration concludes.
Alpha Gap
What is the biggest difference between market expectations and our AI forecasts? The crowd overestimates immediate cash realization while underestimating capital intensitycapital intensityA business condition where large upfront spending on assets and infrastructure is needed to operate and grow.View full glossary entry and balance-sheet friction. Market consensus assumes that high-margin Switchblade demand will immediately translate into distributable owner earningsowner earningsAn estimate of cash available to owners after operating costs, taxes, and the capital spending needed to maintain competitive capacity.View full glossary entry, ignoring that peak factory capexcapital expenditureCapital expenditure (CAPEX) is spending on long-lived assets or major improvements expected to support operations over multiple periods.View full glossary entry absorbs nearly all guided adjusted EBITDAadjusted ebitdaEBITDA modified to exclude selected items that management considers non-recurring or not representative of ongoing operations.View full glossary entry through fiscal 2027. Furthermore, the crowd overlooks that acquired services structurally suppress blended gross marginsgross marginsThe percentage of revenue remaining after deducting the direct costs of producing goods sold.View full glossary entry near 26 percent and that 747.5 million dollars in zero-coupon converts loom in 2030.
Repricing Catalyst
What could make the market recognize and close that gap? Consecutive reporting periods during fiscal 2027 and 2028 demonstrating positive GAAP operating income alongside positive trailing free cash flowfree cash flowFree cash flow (FCF) is cash generated after operating expenses and capital expenditures that remains available for debt reduction, reinvestment, or shareholder returns.View full glossary entry will test market assumptions. The decisive signal will be whether operating cash flowoperating cash flowCash generated or consumed by a company's core business operations.View full glossary entry expands enough to fund ongoing factory tooling without incremental debt, forcing analysts to reprice the equity based on actual cash conversion rather than backlogbacklogThe total value of signed contracts yet to be fulfilled, representing future revenue visibility.View full glossary entry headlines.
Sentiment and Timing
What do sentiment, volatility, and the market-recognition cycle suggest about the thesis timing?
- Greed / Fear
- Fear
- Volatility
- High Erratic
- Cycle position
- Stabilization
Sentiment is caught between fear of post-merger dilutiondilutionReduction in ownership percentage for existing shareholders caused by the issuance of new equity shares.View full glossary entry and optimism over defense appropriations. The core debate is whether the equity is stabilizing at an attractive trough or entering a protracted valuation derating driven by near-zero free cash flowfree cash flowFree cash flow (FCF) is cash generated after operating expenses and capital expenditures that remains available for debt reduction, reinvestment, or shareholder returns.View full glossary entry.
Macro Regime Fit
Does the current market environment support the thesis? The macroeconomic backdrop is a mixed setup. Geopolitical conflict provides a durable sovereign tailwind that insulates defense order intake from economic slowdowns. However, elevated benchmark interest rates and a five percent ten-year Treasury yield penalize long-duration equities that lack current free cash flowfree cash flowFree cash flow (FCF) is cash generated after operating expenses and capital expenditures that remains available for debt reduction, reinvestment, or shareholder returns.View full glossary entry, raising discount rates and complicating future refinancing of 2030 convertible debtconvertible debtDebt instruments convertible into equity, impacting balance sheet risk and potential shareholder dilution.View full glossary entry.
Advisor Disagreement
What do our AI Advisors disagree about most? The sharpest dispute centers on cash conversion timing and sustainable margin structure. Bullish reports argue that headline GAAP losses are purely optical distortions caused by 265 million dollars in non-cash purchase amortization, projecting operating marginsoperating marginsOperating profit as a percentage of revenue after operating expenses, before interest and taxes.View full glossary entry will rapidly surge past 15% as operating leverageoperating leverageThe sensitivity of operating profit to changes in revenue caused by the mix of fixed and variable costs.View full glossary entry takes hold. Skeptical reports counter that BlueHalo introduced structural service-margin dilutiondilutionReduction in ownership percentage for existing shareholders caused by the issuance of new equity shares.View full glossary entry and that capital expenditurescapital expenditureCapital expenditure (CAPEX) is spending on long-lived assets or major improvements expected to support operations over multiple periods.View full glossary entry of 12 to 14 percent of revenue will starve free cash flowfree cash flowFree cash flow (FCF) is cash generated after operating expenses and capital expenditures that remains available for debt reduction, reinvestment, or shareholder returns.View full glossary entry through fiscal 2028. Resolving this tension requires tracking whether fiscal 2027 second-half product gross marginsgross marginsThe percentage of revenue remaining after deducting the direct costs of producing goods sold.View full glossary entry exceed 30% alongside positive .
Base-Case Forces
Event Risk ScoreModerate58/100Near-certain positive forces
Top Drivers / Tailwinds
Near-certain forces that support the investment thesis. These forces are treated as part of the base case (more than 60% probability of occurrence). Impact columns are specific to this asset class.
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| Driver / Tailwind | Category | Est. stock-price impact | Est. earnings impact | Why it matters |
|---|---|---|---|---|
| Doctrinal shift toward attritable autonomy | Sector And Industry | +34% | +50% | Modern conflict validates low-cost loitering munitions and autonomous UAS as permanent military doctrine, replacing expensive crewed hardware. The U.S. Army's LASSO program, Replicator initiatives, and foreign military procurements institutionalize Switchblade as standardized equipment. This programmatic transition secures multi-year procurement pipelines, supporting durable volume expansion and high plant utilization across the forecast horizon. |
| Directed energy counter-UAS commercialization | Innovation And Product | +24% | +35% | The proliferation of hostile drone swarms mandates cost-effective defensive perimeters. The Army's 465 million dollar LOCUST laser contract transitions directed energy from developmental prototypes into fixed-price production. As counter-UAS batteries enter volume manufacturing, the Space, Cyber, and Directed Energy segment should invert from operational losses toward positive contribution, creating an indispensable multi-domain defense franchise. |
| Funded defense backlog conversionbacklog conversionThe process of turning booked orders into delivered revenue and cash flow over time.View full glossary entry | Operational Efficiency | +22% | +36% | A record 1.5 billion dollar funded backlogbacklogThe total value of signed contracts yet to be fulfilled, representing future revenue visibility.View full glossary entry with a 1.4 book-to-bill underpins high revenue visibilityrevenue visibilityHow clearly future revenue can be estimated from contracts, subscriptions, or recurring demand patterns.View full glossary entry. As manufacturing investments in Salt Lake City, Albuquerque, and Huntsville normalize, automated assembly lines will streamline throughput. Converting firmly obligated Pentagon orders into delivered hardware improves fixed-cost absorption, progressively lifting adjusted EBITDAadjusted ebitdaEBITDA modified to exclude selected items that management considers non-recurring or not representative of ongoing operations.View full glossary entry margins toward mid-teens profitability. |
| Allied foreign military sales expansion | Competitive Positioning | +20% | +28% | Geopolitical frictiongeopolitical frictionExternal political tensions impacting global trade and operational stability for international companies.View full glossary entry across Eastern Europe and the Indo-Pacific drives allied defense ministries to accelerate purchases of combat-proven Switchblade and Puma platforms. Foreign military sales carry higher gross marginsgross marginsThe percentage of revenue remaining after deducting the direct costs of producing goods sold.View full glossary entry and favorable payment structures compared to domestic cost-plus development. Expanding export deliveries broadens international revenue mix, insulating corporate cash flows against domestic U.S. appropriations delays. |
Near-certain negative forces
Top Frictions / Headwinds
Near-certain forces that could slow, cap, or damage the thesis. These forces are treated as part of the base case (more than 60% probability of occurrence). Impact columns are specific to this asset class.
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| Friction / Headwind | Category | Est. stock-price impact | Est. earnings impact | Why it matters |
|---|---|---|---|---|
| Peak capexcapital expenditureCapital expenditure (CAPEX) is spending on long-lived assets or major improvements expected to support operations over multiple periods.View full glossary entry suppresses free cash | Capital Allocation | -18% | -10% | Management is guiding fiscal 2027 capexcapital expenditureCapital expenditure (CAPEX) is spending on long-lived assets or major improvements expected to support operations over multiple periods.View full glossary entry to 12-14% of revenue to finance major facility expansions across multiple states. This investment consumes roughly nine-tenths of guided adjusted EBITDAadjusted ebitdaEBITDA modified to exclude selected items that management considers non-recurring or not representative of ongoing operations.View full glossary entry, holding trailing free cash flowfree cash flowFree cash flow (FCF) is cash generated after operating expenses and capital expenditures that remains available for debt reduction, reinvestment, or shareholder returns.View full glossary entry near zero. The resulting cash-generation drought limits shareholder returns and leaves valuation unanchored by cash yield until new plants reach maturity. |
| Valuation premium meets tight monetary regimemonetary regimeThe prevailing framework of central-bank policy, interest rates, money creation, and exchange-rate management.View full glossary entry | Macroeconomic And Macrofinancial | -16% | -5.0% | Trading at roughly 25 times forward adjusted EBITDAadjusted ebitdaEBITDA modified to exclude selected items that management considers non-recurring or not representative of ongoing operations.View full glossary entry and 50 times non-GAAP EPS, the stock already capitalizes substantial operational turnaround. With benchmark interest rates elevated near 4% and long yields near 5%, equity discount rates penalize growth companies whose cash flows sit years in the future, capping multiple expansionmultiple expansionAn increase in valuation ratios such as price-to-earnings or enterprise-value-to-sales.View full glossary entry regardless of operational momentum. |
| Acquired service contract margin dilutiondilutionReduction in ownership percentage for existing shareholders caused by the issuance of new equity shares.View full glossary entry | Operational Efficiency | -14% | -22% | Acquiring BlueHalo injected over 400 million dollars in service revenue, structurally compressing consolidated gross margingross marginsThe percentage of revenue remaining after deducting the direct costs of producing goods sold.View full glossary entry from 39% to 25%. Service lag substantially behind proprietary hardware. Blended profitability cannot rebound toward historical peaks unless product revenue significantly outgrows service contracts, delaying consolidated operating marginoperating marginsOperating profit as a percentage of revenue after operating expenses, before interest and taxes.View full glossary entry expansion across the integration window. |
| Sponsor equity overhang and convertible debtconvertible debtDebt instruments convertible into equity, impacting balance sheet risk and potential shareholder dilution.View full glossary entry | Capital Allocation | -12% | -8.0% | Issuing 18.5 million shares to private equity sponsors created persistent secondary block liquidation pressure across lock-up windows through 2027. Concurrently, 747.5 million dollars of zero-coupon convertible notes mature in 2030. These obligations threaten future share dilution or substantial cash refinancing costsrefinancing costsIncreased interest expenses incurred when rolling over existing debt at higher market rates.View full glossary entry, creating an overhang that dampens valuation multiples as maturity approaches. |
What Could Break or Accelerate the Thesis
Plausible downside scenarios
Tail Risks
Tail yet plausible downside scenarios selected for their highest potential impact.
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| Tail scenario | Chance of Occurring | Stock Price Impact | Exposure category | Why plausible / what changes |
|---|---|---|---|---|
| Flagship program stop-work cancellation | 28% | -38% | Regulatory | A major defense program receives a stop-work order or cancellation during budget reconciliations, replicating the January 2026 SCAR terminal setback. A major program cancellation would idle newly expanded manufacturing capacity, trigger another multi-hundred-million-dollar goodwill impairmentgoodwill impairmentAccounting charge taken when the value of an acquired asset drops below its recorded book value.View full glossary entry write-down, and permanently undermine market confidence in post-merger integration execution. |
| Critical component supply chainsupply chainThe network of suppliers, producers, logistics providers, distributors, and customers involved in creating and delivering a product or service.View full glossary entry embargo | 22% | -32% | Sector And Industry | Escalating trade restrictions or severe geopolitical embargos cut off specialized gallium-nitride semiconductors, rare-earth magnets, or precision seeker optics from Asian refiners. Halting assembly lines would trigger contractual delay penalties, inflate redesign expenses, and create severe inventory carrying costs that eliminate near-term operating cash flowoperating cash flowCash generated or consumed by a company's core business operations.View full glossary entry. |
Plausible upside scenarios
Tail Opportunities
Tail yet plausible upside scenarios selected for their highest potential impact.
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| Tail scenario | Chance of Occurring | Stock Price Impact | Exposure category | Why plausible / what changes |
|---|---|---|---|---|
| Golden Dome national defense mandate | 32% | +44% | Sector And Industry | Congress formally enacts multi-billion-dollar mandatory appropriations for an integrated national counter-drone shield by late 2027. Selecting LOCUST lasers and Titan radio-frequency systems as standard infrastructure would expand funded backlogbacklogThe total value of signed contracts yet to be fulfilled, representing future revenue visibility.View full glossary entry past 3.5 billion dollars, triggering massive manufacturing scale and lifting annual revenues above 3.5 billion dollars ahead of schedule. |
| NATO loitering munition bloc standardization | 26% | +38% | Competitive Positioning | European allied nations formally standardize brigade tactical strike doctrines around the Switchblade 600 platform by mid-2028, initiating pooled multinational defense procurement. This coordinated commercialization wave would bypass bilateral export delays, generating over 1.5 billion dollars in high-margin foreign military deliveries and expanding consolidated gross marginsgross marginsThe percentage of revenue remaining after deducting the direct costs of producing goods sold.View full glossary entry above 36%. |
Company Financial Analysis
AeroVironment Earnings and Financials Analysis by AI
Financial figures available as of Sep 20, 2026. Only filings and source records available by this analysis date are included.
Earnings and financials
AI Review
AeroVironment's top line experienced a dramatic surge in fiscal 2026, with revenue climbing 141 percent to 1.98 billion dollars. However, this explosive growth was driven primarily by the acquisition of BlueHalo rather than organic expansion alone. At the same time, the company reported a GAAP net loss of 265 million dollars, which was heavily influenced by 240.7 million dollars in goodwill impairments and large non-cash purchase accounting amortization charges. The headline accounting loss masks solid underlying operational health. Core adjusted EBITDA reached 286 million dollars for the full year, and early fiscal 2027 results showed quarterly net losses narrowing sharply to 5.1 million dollars on 480.5 million dollars in revenue. While demand is confirmed by a record 1.5 billion dollar funded backlog, turning that revenue into reliable cash flow remains the true test.
Revenue, earnings, and cash flow
The table compares up to five fiscal years of revenue, net income, and free cash flow available to this analysis.
| Fiscal year | Revenue | Net income | Free cash flow |
|---|---|---|---|
| 2026 | USD 2B | USD -265.1M | USD -164.6M |
| 2025 | USD 820.6M | USD 43.6M | USD -24.1M |
| 2024 | USD 716.7M | USD 59.7M | USD -9.2M |
| 2023 | USD 540.5M | USD -176.2M | USD -3.5M |
| 2022 | USD 445.7M | USD -4.2M | USD -31.9M |
Valuation context: historical P/E
The table compares up to five fiscal years of point-in-time valuation evidence available to this analysis.
| Fiscal year | P/E | Earnings basis | Currency basis | Ticker / reporting |
|---|---|---|---|---|
| 2026 | -- | TTM | Loss-making | USD / USD |
| 2025 | >100x | TTM | Native | USD / USD |
| 2024 | 75.4x | TTM | Native | USD / USD |
| 2023 | -- | Annual | Loss-making | USD / USD |
| 2022 | -- | Annual | Loss-making | USD / USD |
P/E uses historical market capitalization and earnings known at each period. Cross-currency observations are normalized to USD using point-in-time FX rates.
Profitability and margins
AI Review
Gross profit margins dropped dramatically from 39.4 percent in fiscal 2025 to 25.3 percent in fiscal 2026. While purchase accounting charges played a role, the compression is largely structural. BlueHalo brought over 400 million dollars in engineering service contracts, which inherently earn lower profit margins than proprietary drone hardware. Underneath the consolidated numbers, performance is sharply divided. Core Autonomous Systems product gross margins have rebounded to 40 percent on strong pricing power. However, service margins remain weak near 8 percent. Consolidated profit margins cannot return to historical peaks until high-margin hardware production significantly outgrows low-margin acquired services.
The table compares up to five fiscal years of operating income and reported profitability margins.
| Fiscal year | Operating income | Operating margin | Net margin |
|---|---|---|---|
| 2026 | USD -70.3M | -3.6% | -13.4% |
| 2025 | USD 40.8M | 5.0% | 5.3% |
| 2024 | USD 71.8M | 10.0% | 8.3% |
| 2023 | USD -178.7M | -33.1% | -32.6% |
| 2022 | USD -9.9M | -2.2% | -0.9% |
Balance sheet and leverage
AI Review
On the surface, AeroVironment maintains a conservative balance sheet, reporting 4.40 billion dollars in equity and a current ratio of 4.30. However, the vast majority of that book value consists of acquired goodwill and intangible assets, which remain vulnerable to write-downs if government programs face cancellation. The critical financial obligation is 747.5 million dollars in zero-coupon convertible notes maturing in 2030. While carrying no annual cash interest expense today, this debt represents a significant future liability. If the stock does not trade high enough to trigger share conversion, management will need substantial cash reserves or new borrowing to repay noteholders.
The table compares up to five fiscal years of debt, liquidity, net cash or debt, and current-ratio evidence.
| Fiscal year | Total debt | Cash + short-term investments | Net cash / (debt) | Current ratio |
|---|---|---|---|---|
| 2026 | USD 834.8M | USD 632.3M | USD 457.5M net debt | 4.30x |
| 2025 | USD 64.3M | USD 40.9M | USD 23.4M net debt | 3.52x |
| 2024 | USD 59.7M | USD 73.3M | USD 13.6M net cash | 3.56x |
| 2023 | USD 162.8M | USD 132.9M | USD 30M net debt | 3.93x |
| 2022 | USD 216.6M | USD 101.9M | USD 139.3M net debt | 3.64x |
Net debt below zero is displayed as net cash. Current ratio is current assets divided by current liabilities.
Capex and investment intensity
AI Review
Management has chosen to direct nearly all available financial resources into an aggressive multi-year industrial expansion. Capital expenditures are budgeted at 12 to 14 percent of revenue in fiscal 2027, totaling approximately 283 million dollars. These funds are financing new production plants and tooling in Salt Lake City, Albuquerque, and Huntsville to support mass assembly of Switchblade munitions and LOCUST lasers. This elevated spending suppresses trailing free cash flow to roughly zero. While building automated factory capacity is necessary to fulfill major Pentagon delivery contracts, it forces shareholders to wait for cash returns. Until these modern facilities reach full commercial production around 2028, capital intensity will remain a significant drag on cash generation.
The table compares up to five fiscal years of capital expenditure and research-and-development investment.
| Fiscal year | Capital expenditure | R&D spend |
|---|---|---|
| 2026 | USD 86.2M | USD 127.7M |
| 2025 | USD 22.8M | USD 158.8M |
| 2024 | USD 24.5M | USD 159.9M |
| 2023 | USD 14.9M | USD 135M |
| 2022 | USD 22.3M | USD 113.7M |
Quarterly Forecast Scenarios
AeroVironment Averaged Consensus Scenarios
One row per forecast quarter. Asset scenario targets are shown in USD; benchmark values are shown in USD.
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| Timeline | Bear Case Stock Price (USD) | Base Case Stock Price (USD) | Bull Case Stock Price (USD) | S&P 500 benchmark (USD) |
|---|---|---|---|---|
| $151.95 | $161.66 | $169.55 | $750.26 | |
| $156.62 | $168.13 | $176.33 | $736.44 | |
| $159.74 | $175.05 | $188.67 | $743.40 | |
| $162.49 | $184.13 | $205.45 | $755.15 | |
| $171.22 | $191.26 | $219.83 | $776.22 | |
| $174.64 | $199.75 | $230.82 | $787.13 | |
| $181.63 | $209.63 | $251.60 | $802.83 | |
| $182.26 | $216.64 | $266.69 | $812.05 | |
| $190.82 | $222.85 | $258.69 | $839.18 | |
| $192.73 | $230.30 | $271.63 | $850.50 | |
| $191.82 | $239.28 | $290.64 | $872.39 | |
| $196.61 | $246.98 | $308.08 | $885.51 | |
| $206.44 | $254.09 | $320.40 | $909.56 | |
| $208.60 | $261.78 | $336.42 | $916.13 | |
| $214.85 | $271.45 | $356.61 | $936.51 | |
| $211.41 | $277.42 | $367.31 | $947.34 | |
| $219.87 | $284.23 | $382.00 | $969.59 | |
| $224.26 | $290.61 | $374.36 | $979.99 | |
| $228.75 | $298.54 | $389.33 | $999.60 | |
| $233.32 | $305.18 | $401.01 | $1,012 |
Behind the synthesis
How each opinion shapes the consensus
The analysis reveals high consensus on secular demand: modern attrition warfare permanently prioritizes loitering munitions, counter-drone defenses, and directed energy, underpinning a record 1.5 billion dollar funded backlog. However, reports diverge sharply on shareholder cash realization. Several analyses uncritically extrapolate top-line expansion into immediate multiple surges, overlooking that fiscal 2027 capital expenditures of 12 to 14 percent consume nearly all guided adjusted EBITDA, holding trailing free cash flow near zero. The strongest contrarian evaluations emphasize evidence from SEC filings: the 240.7 million dollar goodwill impairment, restatements, 747.5 million dollars in zero-coupon convertible notes maturing in 2030, and secondary distribution pressure from Arlington Capital's equity stake. Relative weights favor reports that rigorously incorporate post-merger dilution, persistent service-mix margin compression, and facility capex timing over unverified multiple-expansion narratives.
Universal Investor AI
The Polymath
Opus 5Delivers rigorous evidence-backed analysis incorporating SEC filings, restated goodwill impairments, the 2030 zero-coupon convertible notes, and persistent service-margin dilution. The balanced scenario honors genuine defense programmatic demand while soberly discounting near-term free cash flow.
Universal Investor AI
The Polymath
GPT-6 AstraOffers superior forensic rigor by reconciling August 2026 Form 10-Q filings, contract awards, share dilution, and cash flow exclusions. Its sober assessment of valuation multiples, customer-funded development, and convertible note refinancing risks grounds the consensus.
Michael Burry AI
The Vulture
Gemini 3.8 FlashProvides exceptional forensic insight into peak capital expenditure intensity, private-equity sponsor lock-up distributions, and the Salt Lake City facility ramp. It properly models cash-flow suppression before operating leverage emerges, though slightly overstates terminal margin upside.
Universal Investor AI
The Polymath
Gemini 3.8 FlashProvides thorough documentation of funded backlogs, IDIQ vehicles, and manufacturing milestones at FreedomWerx. It appropriately weights sponsor lock-up risks, but projects an aggressive multi-year compounding path that outpaces probable defense procurement delivery pacing.
Universal Investor AI
The Polymath
Gemini 3.8 FlashAccurately identifies the accounting distortion stemming from non-cash purchase amortization while correctly tracking early fiscal 2027 loss narrowing. The assessment overstates near-term multiple expansion by underplaying cash conversion delays and heavy facility investments through 2028.
Warren Buffett AI
The Value Seeker
Gemini 3.8 FlashDemonstrates prudent valuation discipline, correctly diagnosing that an elevated entry multiple leaves zero margin of safety against execution stumbles. However, it mischaracterizes convertible debt obligations as floating bank debt, slightly impairing its balance-sheet assessment.
Elon Musk AI
The Visionary
Gemini 3.8 FlashStrong technological grasp of autonomous swarming doctrine and counter-UAS physical necessities. Downweighted because the aggressive long-term price-to-sales multiple re-rating understates dilution friction, supply chain constraints, and the Space Force contract recompete risks.
Sherlock Holmes AI
The Whistleblower
Gemini 3.8 FlashOffers good deductive synthesis of pro forma organic growth, funded backlog quality, and amortization schedules. It errs by assuming overly rapid margin expansion, largely overlooking how heavy facility capex dampens free cash flow through fiscal 2028.
Niccolo Machiavelli AI
The Insider
Gemini 3.8 FlashCorrectly assesses institutional procurement access and political capture following sponsor consolidation. However, it displays unwarranted exuberance regarding long-term operating margins and minimizes the mechanical headwind of Arlington Capital secondary equity liquidations.
Warren Buffett AI
The Value Seeker
Gemini 3.8 FlashPresents sound qualitative reasoning regarding loitering munition market leadership and intangible amortization dynamics. However, the analysis ignores verified capital expenditure expansion requirements and provides an unrealistically linear margin recovery without accounting for acquired service contract drag.
Superintelligence AI
The Anthropologist
Gemini 3.8 FlashPresents strong qualitative arguments on attritable loitering munition warfare doctrine. However, the path assumes an immediate multi-year multiple surge, contradicting its own documented supply-chain bottlenecks and elevated starting enterprise valuation.
Ray Dalio AI
The Strategist
Gemini 3.8 FlashAccurately maps macroeconomic transmission, sovereign balance-sheet dynamics, and supply-chain frictions across trade barriers. It is downweighted because its quarterly price path understates the operational friction from dilutive acquired services and ongoing continuing resolutions.
Superintelligence AI
The Anthropologist
Gemini 3.8 FlashCorrectly identifies the core organic momentum in autonomous systems and the commercial scaling of directed energy. However, it overstates long-term margin recovery speed while discounting the severe valuation drag of 2030 convertible note principal settlement.
J.P. Morgan AI
The Titan
Gemini 3.8 FlashCaptures the strategic scope of multi-domain defense consolidation, but relies on hyperbolic assumptions of unconstrained growth and extreme multiple expansion. It severely discounts material integration headwinds, governance risks, and near-term capex cash absorption.
Research Provenance
References & Context
This AeroVironment consensus analysis combines structured market evidence with independent AI-agent forecasts. External references below are limited to sources recorded by the researcher agents for this forecast batch.
Primary analysis inputs
- iPulse AI Multi-Agent Forecasts — independent analyst personas, model outputs, and consensus synthesis.
- iPulse AI Global Events Context — macroeconomic, geopolitical, regulatory, and industry-event context.
- Structured market history — prices, distributions, volatility, identifiers, and listing metadata.
- Company earnings and financial statements — revenue, profitability, balance-sheet, cash-flow, and investment trends.
- Researcher web evidence — public sources consulted to challenge and contextualize the forecast thesis.
Independent AI Advisor panel
- AI Advisors
- 14
- AI Researchers
- 11
- AI Thinkers
- 3
Sources retained from AI Researcher searches
Asset-specific · Researcher webShowing the top 15 of 104 deduplicated sources retained for this batch.
- 01The U.S. Army and the Golden Dome Program | Congress.gov | Library of Congresscongress.gov
- 02AeroVironment Inc - Form 10-K - FY2026sec.gov
- 03AeroVironment Inc - Form 10-Q/A - FY2026sec.gov
- 04AEROVIRONMENT, INC._August 1, 2026sec.gov
- 05AeroVironment Announces Fiscal 2026 Fourth Quarter and Fiscal Year Results | AeroVironment, Inc.investor.avinc.com
- 06AeroVironment Announces Fiscal 2026 Third Quarter Results - AeroVironmentavinc.com
- 07AeroVironment Announces Fiscal 2027 First Quarter Results - AeroVironmentavinc.com
- 08AeroVironment Announces Fiscal 2027 First Quarter Results - AeroVironmentavinc.com
- 09AV Expands Huntsville Facility to Accelerate Production of Next-Generation Freedom Eagle-1 Interceptor - AeroVironmentavinc.com
- 10AV Partners with City of Albuquerque and State of New Mexico in Defense Manufacturing Expansion - AeroVironmentavinc.com
- 11P550 Archives - AeroVironmentavinc.com
- 12The fight over the FY27 defense budget is on. Here's 13 key issues for Congress to resolve. - Breaking Defensebreakingdefense.com
- 13AVAV Stock Quote Price and Forecast | CNNcnn.com
- 14AeroVironment (AVAV) Has $1.5 Billion in Funded Backlog. Can Conversion Support Guidance?finance.yahoo.com
- 15AeroVironment (AVAV) Q1 2027 Earnings Call Transcriptfinance.yahoo.com
And 89 more sources were used and retained in the batch inventory.
Context retained with this Consensus
The same public-safe market, global-event, and fundamental context supplied to the AI Advisor panel.
Global context snapshot
2025 Full-Year Global Market and World-Events Context
Download Archived SnapshotCoverage 2025-01-01 to 2025-12-31 · Knowledge cutoff 2025-12-31
This full-year context package covers the principal geopolitical, economic, monetary-policy, technology, trade, energy, and institutional developments that shaped global markets during 2025. It gives the forecasting model a chronological account of major world events together with their likely transmission into growth, inflation, interest rates, supply chains, commodities, currencies, public markets, and sector-level investment conditions.
The package also includes monthly and quarterly macroeconomic and cross-asset reference tables spanning US and international growth, central-bank policy, sovereign yields, major equity indices, foreign exchange, energy, industrial and precious metals, and digital assets. Quarterly and full-year high-impact summaries are integrated; monthly quantitative series remain working values pending final audit, and that qualification is part of the preserved context.
| Top 3 Market Shifts From File | Date | Status |
|---|---|---|
| DeepSeek shock and AI economics reset | 2025-01-27 | OPEN ENDED TREND |
| US tariff regime escalation and trade-system rupture | 2025-02-01 | ACTIVE POLICY REGIME |
| Federal Reserve easing cycle after a prolonged hold | 2025-09-17 | ACTIVE POLICY REGIME |
Representative Sources of the Context File
And more sources from the retained context package.
2026 Year-to-Date Global Market and World-Events Context Through September 20
Download Archived SnapshotCoverage 2026-01-01 to 2026-09-20 · Knowledge cutoff 2026-09-20
January 1-September 20, 2026: monetary tightening, energy security, trade restrictions, AI financing and divergent growth; five leading market themes.
Fed raised rates to 3.75%-4.00%; ECB hike is in force and BOJ increase starts September 24. Markets through September 18, bitcoin through September 19.
| Top 3 Market Shifts From File | Date | Status |
|---|---|---|
| Renewed monetary tightening amid persistent inflation | 2026-01-30 | ACTIVE POLICY REGIME |
| Iran/Hormuz conflict and wider energy-security disruption | 2026-02-28 | ONGOING |
| Tariff legal reset and strategic supply restrictions | 2026-02-20 | ACTIVE POLICY REGIME |
Representative Sources of the Context File
And more sources from the retained context package.
Fundamental context
Income statement
9 fieldsdepreciationAndAmortization · ebit · ebitda · grossProfit · +5 more fields
Balance sheet
12 fieldscash · commonStockSharesOutstanding · longTermDebt · netDebt · +8 more fields
Cash flow
5 fieldscapitalExpenditures · dividendsPaid · freeCashFlow · salePurchaseOfStock · +1 more field
annual: 2015-04-30–2026-04-30, 12 periods; quarterly: 2023-10-31–2026-07-31, 12 periods
Currencies cited: USD (quote USD; primary reporting USD; converted/valuation USD).
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