AeroVironment (AVAV) Stock Forecast & Price Target

AeroVironment is positioned for durable growth because its core Autonomous Systems franchise already has a 60,000-plus installed base across more than 55 countries, supporting recurring demand for replacements, upgrades, training, and sustainment while domestic defense priorities continue to favor attritable, mass-producible systems. Its investment case is strengthened by counter-UAS, where Titan, LOCUST, and Freedom Eagle-1 have moved from demonstration to funded production, with funded backlog at $1.46 billion, book-to-bill near 1.6x, and counter-UAS revenue expected to rise from about 11% of revenue in FY26 to about 20% in FY28. While SCDE has been pressured by the SCAR termination and losses, LOCUST’s $464.8 million E-HEL award and first international order provide a clearer path to higher margins, operating leverage, and improved cash generation.

AeroVironment is facing a weakened fundamental profile because the BlueHalo acquisition has not delivered as expected, with SCAR’s termination reducing backlog, triggering a goodwill impairment, and exposing control issues after a restatement and internal-control weaknesses. Financially, SCDE posted a fiscal 1Q27 revenue decline and an $8.9 million adjusted EBITDA loss, while FY26 free cash flow was negative $165 million and working capital climbed to $969.4 million, reflecting heavy inventory and unbilled receivables. The outlook is further pressured by execution risk in counter-UAS, FE-1, LOCUST and Titan, plus intensifying competition and lower pricing power as government buyers increasingly keep multiple vendors in play.