AeroVironment (AVAV) Is Up 10.6% After Securing Major U.S. Air Force HELMSSMAN Contract – Has The Bull Case Changed?

• In recent weeks, AeroVironment, Inc. announced it has been selected for a 10-year, US$499 million single-award contract with the U.S. Air Force Research Laboratory to advance High-Performance Electromagnetic Spectrum Survivable Materials under the HELMSSMAN program, alongside the launch of new capability enhancements for its Puma LE drone system.
• This contract focuses on developing protective materials for electromagnetic radiation, underscoring AeroVironment’s expanding expertise in directed energy and AI-powered defense solutions supporting frontline military operations.
• Now, we'll explore how landing this major U.S. Air Force contract could shape AeroVironment’s investment narrative going forward.

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AeroVironment Investment Narrative Recap

Owning AeroVironment means believing in the growing need for advanced, AI-driven defense technology and the company’s ability to secure multi-year government contracts. This new US$499 million Air Force deal amplifies visibility for near-term backlog growth, yet, AeroVironment’s reliance on U.S. defense spending continues to be its greatest risk should budgets or procurement priorities shift unexpectedly.

The September launch of enhanced payloads for the Puma LE drone is especially relevant, as it connects emerging product versatility directly to the company’s push for expanded frontline relevance, helping sustain contract momentum and reinforcing AeroVironment’s case as a crucial supplier in future military modernization.

However, in contrast to surging orders, investors must be mindful of AeroVironment’s concentrated exposure to U.S. government funding cycles, as...

Read the full narrative on AeroVironment (it's free!)

AeroVironment's outlook anticipates $2.6 billion in revenue and $264.5 million in earnings by 2028. This projection is based on a 47.0% annual revenue growth rate and an increase in earnings of $220.9 million from the current $43.6 million level.

Uncover how AeroVironment's forecasts yield a $331.67 fair value, a 17% downside to its current price.

Exploring Other Perspectives

Nine individual fair value estimates from the Simply Wall St Community place AeroVironment between US$130.46 and US$335 per share. In light of large new contracts, you are invited to compare these diverse views with the ongoing risk of revenue volatility tied to U.S. government spending.

Explore 9 other fair value estimates on AeroVironment - why the stock might be worth as much as $335.00!

Build Your Own AeroVironment Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your AeroVironment research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.
• Our free AeroVironment research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate AeroVironment's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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