AVAV Shares Decline Following Space Force's Termination of SCAR Contract, Yet Retail Investors Believe a Rebound is Imminent
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 11 2026
0mins
Should l Buy AVAV?
Source: stocktwits
AeroVironment's SCAR Program Update: The U.S. Space Force has decided to reopen the SCAR program for competitive bids, following the termination of AeroVironment's existing contract due to disagreements over financial terms rather than technical issues.
Financial Impact on AeroVironment: The termination of the SCAR contract has led to a projected $151 million non-cash goodwill impairment for AeroVironment in Q3, significantly affecting the company's financial outlook.
Future Revenue Projections: AeroVironment has adjusted its 2026 revenue forecast to between $1.85 billion and $1.95 billion, while also revising projected earnings per share to a range of $2.75 to $3.10.
Market Reaction: Following the news, AeroVironment's stock experienced a sharp decline, trading over 9% lower, as investor concerns grew regarding the company's financial stability and future contracts.
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Analyst Views on AVAV
Wall Street analysts forecast AVAV stock price to rise
13 Analyst Rating
13 Buy
0 Hold
0 Sell
Strong Buy
Current: 206.270
Low
315.00
Averages
390.75
High
450.00
Current: 206.270
Low
315.00
Averages
390.75
High
450.00
About AVAV
AeroVironment, Inc. is a defense technology provider delivering integrated capabilities across air, land, sea, space, and cyber. The Company develops and deploys autonomous systems, precision strike systems, counter-UAS technologies, space-based platforms, directed energy systems, and cyber and electronic warfare capabilities. The Company’s segments include Autonomous Systems (AxS) and Space, Cyber, and Directed Energy (SCDE). The AxS segment focuses on the design, development, production, delivery, and support of intelligent, multi-domain robotic systems, including uncrewed aircraft systems (UAS) and ground robot systems. It includes the Company’s former Uncrewed Systems, Loitering Munitions Systems, and MacCready Works segments as well as Radio Frequency and Kinetic Counter-UAS Electronic Warfare Systems and others. The SCDE segment focuses on advanced technologies in the space domain providing space-based and ground-based platforms, cyber capabilities, and directed energy systems.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Order Flexibility: The contract stipulates that work locations and funding will be set per order, ensuring project flexibility and adaptability, thereby enhancing the company's competitiveness in a dynamic market environment.
- Project Completion Timeline: The project is expected to be completed by July 23, 2026, providing AeroVironment with a clear delivery target that aids in future financial planning and adjustments.
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See More
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- Lack of Transparency: Warren's letter to the Defense Secretary highlights the DoD's failure to adequately respond to her inquiries about the Trump family's involvement in defense contracts, indicating a troubling lack of transparency that could undermine public trust in the DoD's fairness.
- Potential Corruption Risks: Warren warns that the Trump family's business interests pose a corruption risk regarding DoD contracts, particularly with the involvement of Trump's children, which could compromise the impartial assessment of national security and defense needs.
- Drone Contract Controversy: Warren notes that the drone company Powerus, backed by Trump's children, is seeking DoD contracts while the Pentagon invests approximately $1 billion in domestic drone production, raising concerns about potential conflicts of interest.
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See More
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- System Introduction: AeroVironment unveiled the Locust X3 high-energy laser weapon system on Tuesday, aimed at countering drones and other unmanned threats, although its shares fell 2.3% during midday trading in New York, indicating a lukewarm market response.
- Technical Specifications: The system features a laser output ranging from 20 kilowatts to over 35 kilowatts, along with automated software for detection, tracking, and targeting, allowing integration across various environments including ground vehicles, fixed installations, and maritime platforms, enhancing operational flexibility.
- Cost Efficiency: Compared to conventional interceptors, the laser system offers a relatively low cost per engagement and operates without the need for physical ammunition reloads, with analysts noting that this feature is increasingly relevant as militaries face the growing use of low-cost drones and swarm tactics.
- Strategic Implications: The launch of the Locust X3 system signifies AeroVironment's deeper commitment to counter-drone and directed-energy technologies, aligning with the trend of increased defense spending, which is expected to bolster the company's competitiveness in the defense market.
See More
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- High-Energy Laser System Launch: AeroVironment introduces the LOCUST®X3, featuring a 20-35 kW laser output capable of defeating drone threats at under $5 per shot, significantly enhancing modern air defense capabilities to meet rapidly evolving battlefield demands.
- Modular Design Advantages: The LOCUST X3's modular design allows for seamless integration across various platforms, ensuring flexible deployment at tactical edges and fixed sites, thereby enhancing responsiveness to large-scale aerial threats.
- Sustained Operational Capability: This system is battle-tested, leveraging lessons from previous deployments to improve performance and maintainability, ensuring continuous defense in high-density threat environments and enhancing the security of critical infrastructure.
- AI-Driven Precision Engagement: The LOCUST X3 integrates AV_Halo™ software, providing precise target identification and tracking capabilities, allowing operators to focus on missions and improving operational efficiency and response speed.
See More
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- Technological Advantage: The newly developed 'Licerion HE' lithium-metal battery cells boast energy densities exceeding 500 watt-hours per kilogram, significantly higher than the 300-350 Wh/kg of current lithium-ion batteries, making them suitable for drones and other critical platforms, enhancing competitiveness in the defense market.
- Production Capacity Enhancement: Sion Power's 110,000-square-foot facility in Arizona is being repurposed to focus on defense product manufacturing, with plans to convert production lines to meet the growing defense demand, further solidifying its market position.
- Investment and Funding: The company has raised over $200 million for lithium-metal cell development, with investors including LG Energy Solution, and plans to launch new products between the second half of 2026 and into 2027, indicating strong market prospects and growth potential.
See More
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Company Overview: Ondas, a company focused on autonomous drones, is partnered with Palantir.
Financial Performance: The company reported its fourth-quarter financial results, indicating positive growth.
Future Expectations: Ondas anticipates significant growth in its autonomous systems business by 2026.
Market Reaction: Following the financial report, shares of Ondas saw an increase on Monday.
See More
