AeroVironment Gains After $500M Army Contract, Strong Quarter

AeroVironment shares rose about 4% in premarket trading after the U.S. Army awarded the company a $500 million contract for counter‑unmanned aerial systems and after AeroVironment reported strong fiscal fourth‑quarter results. The contract and the earnings report were announced this week.

The firm‑fixed‑price agreement was issued by Army Contracting Command at Detroit Arsenal, Michigan. It covers procurement of commercial counter‑UAS and counter small‑UAS capabilities, with work locations and funding set by individual orders. The contract is expected to run through June 29, 2029, and carries number W912CH‑26‑D‑A073.

For the fiscal fourth quarter ended April 30, 2026, AeroVironment reported revenue of $641.6 million, a 133% increase from the prior year. Management attributed part of the rise to the acquisitions of BlueHalo and Empirical Systems Aerospace; excluding those deals, organic revenue grew about 31%.

Non‑GAAP adjusted EBITDA rose to $140.1 million, lifting the adjusted EBITDA margin to 22%. Adjusted earnings per share increased to $1.84 from $1.61 in the same quarter a year earlier.

The company finished fiscal 2026 with a funded backlog of $1.2 billion, up from $726.6 million a year earlier. Full‑year bookings were $2.7 billion against roughly $2.0 billion in revenue, producing a book‑to‑bill ratio of 1.4. Management projected fiscal 2027 revenue of $2.1 billion to $2.2 billion, a midpoint that implies about 10% growth compared with fiscal 2026.

AeroVironment reported that counter‑UAS sales generated roughly $200 million of revenue in fiscal 2026. The company described a three‑layer approach to growing that business that includes the Titan family of radio‑frequency jamming systems, the LOCUST directed‑energy system under development, and the Freedom Eagle‑1 kinetic interceptor.

CEO Wahid Nawabi forecast rapid expansion in the counter‑UAS and directed‑energy businesses, saying he would not be surprised if those areas were as large as, or several times larger than, current levels within three to five years.

Some market participants cautioned on valuation and potential volatility. At current guidance midpoints, the stock trades at about 54 times projected adjusted earnings. Analysts maintain a consensus rating of Strong Buy with a mean 12‑month price target near $295.

AeroVironment is based in Simi Valley, California, and produces unmanned aircraft systems and tactical missile systems for military and commercial customers. The company is known for its Switchblade loitering munitions and has been expanding into counter‑drone technologies as demand for such systems grows.