AeroVironment (AVAV) AI Stock Analysis

• Market Cap: $3.89B
• Dividend Yield: N/A
• Average Volume (3M): 584.27K
• Price to Earnings (P/E): 118.9
• Beta (1Y): 0.96
• Revenue Growth: 5.21%
• EPS Growth: N/A
• Country: US
• Employees: 1,403
• Sector: Industrials
• Sector Strength: 61
• Industry: Aerospace & Defense
• EPS (TTM): 1.17
• Shares Outstanding: 28,218,842
• 10 Day Avg. Volume: 527,657
• 30 Day Avg. Volume: 584,267
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 4.75
• Price to Cash Flow (P/CF): -34.20
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $190.25
• Price Target Upside: 36.90% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

AeroVironment's overall score reflects strong revenue growth and a solid balance sheet, countered by challenges in profitability and cash flow. Technical analysis indicates a bearish trend, while high P/E suggests overvaluation. Despite these issues, the company's strategic investments and strong backlog provide some optimism for future growth.

Positive Factors

Market Opportunities

The acquisition of BlueHalo provides AeroVironment exposure to new markets such as Space, C-UAS, EW & Cyber, and Unmanned Maritime Systems, showing a proactive approach to diversifying the portfolio.

Revenue Growth

The acquisition of BlueHalo is expected to significantly boost AeroVironment's revenue and market opportunities, doubling its size with a projected $2 billion in revenues.

Shareholder Confidence

More than 99% of shareholders voted in favor of the acquisition, indicating strong confidence that the deal will add value and lead to both near- and long-term success for AeroVironment.

Negative Factors

EBITDA Margins

The acquisition will not be accretive to adjusted EBITDA margins due to BlueHalo's exposure to services revenues, which are generally margin-dilutive.

Operational Challenges

Operational challenges in Q3 resulted in a decline in revenue, overshadowing positive future outlooks.

Utility Disruptions

The quarter missed financials, attributed to the Southern California heavy winds causing the utility providers to shut off electricity for AeroVironment’s manufacturing facilities for multiple weeks.

AeroVironment Business Overview & Revenue Model

Company Description

AeroVironment, Inc. designs, develops, produces, delivers, and supports a portfolio of robotic systems and related services for government agencies and businesses in the United States and internationally. It operates through four segments: Unmanned Aircraft Systems (UAS), Tactical Missile System (TMS), Medium Unmanned Aircraft Systems (MUAS), and High Altitude Pseudo-Satellite Systems (HAPS). The company supplies UAS, TMS, unmanned ground vehicle, and related services primarily to organizations within the U.S. Department of Defense and to international allied governments. It also designs, engineers, tools, and manufactures unmanned aerial and aircraft systems, including airborne platforms, payloads and payload integration, ground control systems, and ground support equipment and other items and services related to unmanned aircraft systems. In addition, the company offers small UAS products, including spare equipment, alternative payload modules, batteries, chargers, repair services, and customer support, as well as multiple aircraft, hand-held ground control system, and spare parts and accessories. Further, it develops high-altitude pseudo-satellite UAS systems. The company was incorporated in 1971 and is headquartered in Arlington, Virginia.

How the Company Makes Money

AeroVironment generates revenue primarily through the sale of its unmanned aircraft systems and related services to government agencies, defense contractors, and commercial clients. Key revenue streams include contracts with the U.S. Department of Defense and allied nations, which account for a significant portion of its earnings. The company also leverages its proprietary technology to offer data analytics and integration services, expanding its market reach into sectors such as agriculture, energy, and infrastructure. Strategic partnerships with other defense and technology firms help AeroVironment enhance its product offerings and access new markets, further contributing to its financial performance.

AeroVironment Financial Statement Overview

Summary

AeroVironment shows strong revenue growth and a robust balance sheet with low leverage, which positions it well in the industry. However, profitability margins and cash flow generation are areas needing improvement for sustained financial health.

Income Statement

AeroVironment has demonstrated solid revenue growth with a TTM (Trailing-Twelve-Months) revenue of $714.67M compared to $445.73M in 2022. The gross profit margin improved over time, indicating efficient cost management, but the net profit margin shows volatility, with recent margins at 4.62% in TTM. The EBIT and EBITDA margins have seen fluctuations, with TTM margins at about 4.63% and 7.03%, respectively. Overall, the company exhibits growth potential with some profitability challenges.

Balance Sheet

AeroVironment boasts a strong balance sheet with a high equity ratio of approximately 82.1% in TTM, reflecting financial stability. The debt-to-equity ratio is low at 0.04, indicating low leverage risk. However, the return on equity (ROE) is modest at 3.83%, suggesting room for improving shareholder returns. The company's solid equity position strengthens its financial footing.

Cash Flow

The cash flow statement reveals challenges in generating free cash flow, with a negative free cash flow of $-21.81M in TTM. While operating cash flow was negative at $-12.73M, the ratio of operating cash flow to net income suggests inefficiencies in cash generation. The company needs to improve its cash generation capabilities to enhance financial flexibility.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
742.56M	716.72M	540.54M	445.73M	394.91M	367.30M
	Gross Profit
290.75M	283.29M	173.51M	141.24M	164.56M	153.10M
	EBIT
33.08M	71.82M	-22.99M	-20.20M	43.31M	47.13M
	EBITDA
50.23M	103.20M	-79.08M	43.35M	54.24M	57.02M
	Net Income Common Stockholders
33.00M	59.67M	-173.71M	-8.77M	33.83M	41.07M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
76.66M	73.30M	132.86M	101.95M	180.71M	302.65M
	Total Assets
276.21M	1.02B	824.58M	914.20M	928.57M	584.95M
	Total Debt
0.00	59.68M	162.82M	216.57M	222.77M	10.21M
	Net Debt
-76.66M	-13.62M	29.96M	139.34M	74.03M	-244.93M
	Total Liabilities
44.65M	193.12M	273.61M	305.99M	316.46M	75.05M
	Stockholders Equity
231.56M	822.75M	550.97M	607.97M	612.09M	509.90M
Cash Flow		Free Cash Flow
-21.81M	-9.19M	-3.47M	-31.91M	75.27M	13.88M
	Operating Cash Flow
-12.73M	15.29M	11.40M	-9.62M	86.53M	25.10M
	Investing Cash Flow
-26.88M	-51.71M	-7.00M	-52.29M	-378.77M	59.17M
	Financing Cash Flow
-20.62M	-22.85M	50.83M	-16.61M	194.16M	-1.83M

AeroVironment Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 138.97
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AVAV, the sentiment is Neutral. The current price of 138.97 is above the 20-day moving average (MA) of 124.72, below the 50-day MA of 143.25, and below the 200-day MA of 175.01, indicating a neutral trend. The MACD of -7.51 indicates Negative momentum. The RSI at 34.63 is Neutral, neither overbought nor oversold. The STOCH value of 24.47 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for AVAV.

AeroVironment Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	62 Neutral	$7.68B	13.06	3.21%	3.34%	3.62%	-14.40%
MRCY	61 Neutral	$2.66B	―	-6.10%	―	-1.21%	-4.63%
KTOS	59 Neutral	$4.88B	297.47	1.40%	―	9.57%	―
AVAV	58 Neutral	$3.89B	118.88	3.94%	―	5.21%	―
ACHR	44 Neutral	$4.03B	―	-95.88%	―	―	17.43%
SPR	40 Underperform	$3.89B	―	81.63%	―	4.44%	-202.63%

AeroVironment Corporate Events

AeroVironment Advances with BlueHalo Acquisition Approval

On April 1, 2025, AeroVironment’s stockholders approved the issuance of common stock to facilitate the company’s acquisition of BlueHalo LLC, marking a significant step towards becoming a leading next-generation defense technology company. The transaction, expected to close in May 2025, aims to enhance AeroVironment’s capabilities in delivering integrated, all-domain solutions, thereby creating new growth and value opportunities.

AeroVironment Reports Record Backlog Amid Revenue Decline

AeroVironment reported its fiscal 2025 third-quarter results, highlighting a record funded backlog of $763.5 million and a 10% year-over-year revenue decrease to $167.6 million. The company faced challenges such as high winds and fires in Southern California, impacting its operations. Despite these hurdles, AeroVironment made progress in its long-term growth strategy, including record orders for Switchblade and Jump-20, and announced a new Utah manufacturing facility to increase capacity. The company also advanced its acquisition of BlueHalo, expected to close in the second quarter of 2025. AeroVironment anticipates a strong fiscal year 2025 with record fourth-quarter revenue, despite transitioning away from Ukraine demand.