International Defense Spending And BlueHalo Acquisition Will Drive Unmanned Advancements

AeroVironment’s price target was raised as analysts point to rising global demand for unmanned systems, enhanced growth potential from the BlueHalo acquisition, capital optimization, and strong operational execution—driving the consensus analyst price target up from $282.57 to $286.94.

Analyst Commentary

• Bullish analysts cited the accelerating multi-year supercycle in the domestic and global unmanned aerial systems market, with AeroVironment uniquely positioned due to market share gains, expanded manufacturing capacity, and a portfolio aligned to unprecedented defense spending.
• The strategic BlueHalo acquisition has significantly enhanced AeroVironment's product breadth, providing further exposure to munitions, counter-UAS, directed energy, and other high-growth defense tech segments; analysts expect robust sales and margin expansion as a result.
• Recent capital optimization (notably the share and convertible debt issuance with subsequent debt paydown) is expected to boost EPS through reduced interest expense, despite share dilution.
• Hawkish geopolitical trends, especially lessons from the Ukraine conflict and the transformational use of inexpensive drone technology, have validated AeroVironment’s offerings (such as Switchblade and Puma) and are driving increased global demand.
• Strong recent quarters, improved guidance, and stable funded backlog—even amid high sales and temporary unfunded backlog volatility—are reinforcing confidence in sustained double-digit growth and the company’s leadership in next-gen defense solutions.

What's in the News

• AeroVironment has successfully delivered its new P550™ small UAS to the U.S. Army for the Long-Range Reconnaissance program, emphasizing rapid deployment, modular upgrades, and advanced autonomy for battlefield adaptability; the initial rollout included comprehensive equipment and operator training (Key Developments).
• The company continues to progress on multiple innovation fronts, notably advancing its Wildcat Group 3 VTOL UAS for DARPA’s EVADE program, and unveiling the “Skyfall” Mars Helicopters concept with NASA JPL aimed at future human Mars missions (Key Developments).
• Strategic alliances have expanded, with a new partnership announced with ISS to deliver a secure, standards-based V2X platform for real-time connected vehicle data; AeroVironment is also collaborating with SNC to develop next-generation, open-architecture air and missile defense solutions for the Golden Dome for America initiative (Key Developments).
• Recent commercial activity includes the successful completion of an $875 million follow-on equity offering and addition to the S&P 400, as well as a shift in underwriters for a $650 million fixed-income offering; several classes of stock remain subject to a lock-up until September 30, 2025 (Key Developments).
• Government support remains robust as the FY26 U.S. defense budget plans to sustain high-tech drone procurement; AeroVironment’s platforms continue to secure contracts such as support for the U.S. Space Force SCAR program and expansion of ISR services deployed with the U.S. Navy’s 4th Fleet (Reuters, Key Developments).

Valuation Changes

Summary of Valuation Changes for AeroVironment

• The Consensus Analyst Price Target remained effectively unchanged, moving only marginally from $282.57 to $286.94.
• The Future P/E for AeroVironment has significantly fallen from 89.22x to 74.26x.
• The Net Profit Margin for AeroVironment has significantly risen from 9.03% to 10.15%.