AeroVironment, Inc. (AVAV): A Bull Case Theory
We came across a bullish thesis on AeroVironment, Inc. on Investing With Purpose’s Substack. In this article, we will summarize the bulls’ thesis on AVAV. AeroVironment, Inc.'s share was trading at $272.07 as of September 17th. AVAV’s trailing and forward P/E were 149.83 and 144.93, respectively according to Yahoo Finance.
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AeroVironment, Inc. (AVAV) is positioned as a high-beta, speculative growth company in the defense and unmanned systems market, with a market capitalization of approximately $11–12 billion and a backlog of ~$1.1 billion. The company’s FY25 revenue is estimated at $821 million, with Q1 FY26 revenue of $455 million, reflecting an exceptional 140% year-over-year increase. FY26 guidance targets $1.9–2.0 billion in revenue, with EBITDA projected between $300–320 million. AVAV’s business is driven by multiple segments, including small and medium unmanned aerial systems (UAS), loitering munitions, and directed energy solutions, while recent BlueHalo acquisition synergies are expected to further enhance capabilities and revenue potential.
Despite its impressive growth trajectory, the company is highly dependent on the U.S. Department of Defense, which accounts for roughly 90% of its business, making execution and contract delivery critical for sustaining performance. Valuation metrics are notably rich, with EV/Sales around 11–12× and EV/EBITDA exceeding 100×, reflecting market expectations of flawless execution and continued high growth. Analysts’ price targets range from $267 to $335, underscoring the premium placed on AVAV’s potential.
The combination of explosive revenue growth, innovative product segments, and strategic acquisitions positions the company for substantial upside, yet its concentrated customer base and high valuation introduce significant risk and volatility. Investors are likely to view AVAV as a high-reward opportunity, contingent on continued execution excellence and successful integration of new capabilities, making it a compelling, though speculative, growth story within the defense technology sector.
Previously we covered a bullish thesis on AeroVironment, Inc. (AVAV) by Stock Picker’s Corner in January 2025, which highlighted the company’s leadership in unmanned aerial vehicles and rising demand from the U.S. military and global defense sectors. The stock has appreciated approximately 68.9% since our coverage. The thesis still stands as AVAV benefits from growing UAV adoption. Investing With Purpose shares a similar perspective but emphasizes AVAV’s comparison with Anduril Industries, highlighting rapid growth and high-beta, speculative valuation.
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