AeroVironment (AVAV) Is Up 19.4% After Securing $499M USAF HELMSSMAN Contract and Puma LE Upgrades

• AeroVironment announced it has been awarded a 10-year, single-award US$499 million contract by the U.S. Air Force Research Laboratory for the HELMSSMAN program to develop electromagnetic spectrum survivability materials, alongside launching advanced capability upgrades for its Puma LE unmanned aircraft system.
• This milestone reflects the company's growing presence in advanced defense technology and strengthens its position as a key supplier to U.S. and allied military customers.
• We'll examine how this major U.S. Air Force contract win accelerates AeroVironment's expansion in electromagnetic protection and defense innovation.

Find companies with promising cash flow potential yet trading below their fair value.

AeroVironment Investment Narrative Recap

To be a shareholder in AeroVironment, you need conviction that the company can maintain leadership as defense priorities shift toward advanced electromagnetic and autonomy-focused solutions, especially as the global defense sector accelerates its modernization. The headline US$499 million U.S. Air Force contract further supports AeroVironment’s contract backlog and may address short-term concerns about revenue stability, but its dependence on U.S. government budgets still remains the most immediate risk, with volatility likely if these funding streams face delays or reallocation.

Among recent announcements, the enhanced Puma LE unmanned aircraft system, with its new Laser Target Designator and Universal Gimbal Kit, underlines AeroVironment’s commitment to expanding technologically advanced solutions. This ties directly to the short-term catalyst of capturing greater defense spending on multi-mission, modular, autonomous platforms at a time when the company’s government customer base is ramping up demand for these next-generation capabilities.

However, in contrast, investors should be aware that despite these contract wins, AeroVironment’s heavy reliance on domestic government funding presents...

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 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.

Uncover how AeroVironment's forecasts yield a $331.67 fair value, a 8% downside to its current price.

Exploring Other Perspectives

Eight Simply Wall St Community members estimate AeroVironment’s fair value from US$130.46 to US$335 per share, illustrating a wide valuation spectrum. With revenue highly concentrated in U.S. defense contracts, funding shifts or new competition could quickly influence both the stock price and long-term performance, explore these varied viewpoints to understand the range of possible company outcomes.

Explore 8 other fair value estimates on AeroVironment - why the stock might be worth less than half the current price!

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.

Interested In Other Possibilities?

Every day counts. These free picks are already gaining attention. See them before the crowd does:

• AI is about to change healthcare. These 31 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10b in market cap - there's still time to get in early.
• Outshine the giants: these 24 early-stage AI stocks could fund your retirement.
• Trump has pledged to "unleash" American oil and gas and these 22 US stocks have developments that are poised to benefit.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com