AeroVironment Receives $11M Contract From NSPA For Unmanned Aircraft Systems

AeroVironment has received four fixed-price orders worth $11 million from the NATO Support and Procurement Agency (NSPA) for Puma 3 AE tactical unmanned aircraft systems (UAS) and initial spares packages, the unmanned aircraft systems’ company said on Tuesday.

AeroVironment’s (AVAV) VP and small UAS product line general manager, Trace Stevenson said, “The Puma AE unmanned aircraft system enables frontline forces to gather real-time intelligence, surveillance and reconnaissance in any operational environment. Puma AE and other products within AeroVironment’s family of tactical UAS use a common ground control station and software, providing increased capability to the warfighter and greater interoperability among NATO forces.”

The orders are part of AVAV’s three-year base contract received from NSPA in January last year. The contract also includes an option for AVAV to provide two additional years of logistics support for Raven, Wasp and Puma tactical UAS. According to AVAV, the total potential value of the multi-year contract is $80 million.

The company received the orders in October and December last year and AVAV expects to deliver the UAS by June this year. (See AeroVironment stock analysis on TipRanks)

Last month, Raymond James analyst Brian Gesuale reiterated a Hold on the stock post the company’s third quarter results. Gesuale noted, “FY21 estimates look to be in the bag at this point (95% visibility), and accelerating international markets coupled with dissipating COVID headwinds position FY22 models with an upward bias. That said, valuation remains a hurdle for us due to broader budgetary pressure and the new administration.”

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating. That’s based on 4 analysts suggesting a Buy and 2 analysts recommending a Hold. The average analyst price target of $125 implies around 4.3% upside potential to current levels.