3 Defense Stocks Poised for Growth Amid Conflict
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 05 2024
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Should l Buy AVAV?
Source: Business Insider
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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: 227.290
Low
315.00
Averages
390.75
High
450.00
Current: 227.290
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.
AeroVironment Set to Announce Q3 Earnings on March 10
- Earnings Announcement Schedule: AeroVironment (AVAV) is set to announce its Q3 earnings on March 10 after market close, with consensus estimates predicting an EPS of $0.69 and revenue of $475.65 million, indicating investor interest in the company's performance.
- Performance Expectations Analysis: Over the past two years, AVAV has beaten EPS estimates 50% of the time and revenue estimates 88% of the time, although recent downward revisions of EPS estimates by 10 times suggest a cautious market outlook on the company's future performance.
- Revenue Estimate Changes: While there has been one upward revision in revenue estimates, there have also been 12 downward revisions, reflecting analysts' concerns about the company's revenue growth potential, which may impact investor confidence.
- Military Contract Approval: AeroVironment recently secured a $97.4 million contract from the U.S. Army to advance next-gen sensor testing, which not only strengthens the company's order book but also potentially provides funding for future technological advancements.
See More
AeroVironment Q4 Preview: $1.4B Problem
- Earnings Preview Miss: AeroVironment's projected non-GAAP EPS of $0.64 for Q4 falls short by $0.05, indicating significant pressure on profitability that could undermine investor confidence.
- Revenue Shortfall: The anticipated revenue of $408.05 million is $67.6 million below analyst expectations, which may adversely affect the company's liquidity and future investment plans.
- Negative Market Reaction: The disappointing earnings forecast could lead to downward pressure on AeroVironment's stock price, prompting investors to closely monitor how the company addresses its current financial challenges to restore market confidence.
- Uncertain Industry Outlook: Despite the substantial potential in the drone and laser technology markets, AeroVironment's performance does not reflect this growth trend, suggesting a need for a reassessment of its market strategy to adapt to industry changes.
See More
AeroVironment Q3 Earnings Miss Expectations
- Earnings Miss: AeroVironment reported a Q3 non-GAAP EPS of $0.64, missing expectations by $0.05, indicating pressure on profitability that could undermine investor confidence.
- Revenue Growth Below Expectations: The company achieved revenue of $408.05 million in Q3, a 143.5% year-over-year increase, yet fell short of market expectations by $67.6 million, reflecting challenges from intensified market competition and demand fluctuations.
- Fiscal 2026 Outlook Downgraded: AeroVironment now anticipates fiscal year 2026 revenue between $1.85 billion and $1.95 billion, below the consensus of $1.96 billion, signaling a cautious outlook on future growth.
- Increased Net Loss Projections: The company expects a net loss between $218 million and $201 million, with diluted loss per share projected between $4.44 and $4.10, highlighting the financial pressures faced during its expansion efforts.
See More
AeroVironment Reports Earnings Miss and Revenue Guidance Cut
- Earnings Performance: AeroVironment reported quarterly earnings of 64 cents per share, missing the consensus estimate of 69 cents, indicating pressure on profitability that may affect investor confidence.
- Revenue Shortfall: The quarterly revenue of $408.05 million fell short of the Street estimate of $475.63 million by 14.21%, highlighting challenges in sales growth for the company.
- Orders and Backlog: Despite the revenue miss, AeroVironment achieved bookings of $2.1 billion and a funded backlog of $1.1 billion, significantly up from $726.6 million year-over-year, indicating strong future growth potential.
- Outlook Adjustment: The company lowered its fiscal 2026 adjusted EPS guidance to a range of $2.75 to $3.10, below the analyst estimate of $3.31, reflecting a cautious outlook on future performance.
See More
AeroVironment Faces Securities Fraud Investigation Amidst Poor Earnings
- Earnings Miss: AeroVironment reported earnings per share of only $0.44 for Q2 of fiscal 2026, significantly below the consensus estimate of $0.80, resulting in a major setback in financial performance that undermines investor confidence.
- Plummeting Gross Margins: The company's gross margins fell sharply from 43% in the prior year to 20.9%, with cost of goods sold surging to 79% of revenue, indicating severe cost control issues that could lead to ongoing profitability challenges.
- Stock Price Collapse: Following the earnings report, AeroVironment's stock price plummeted by $36.17, or 12.85%, on December 10, 2025, reflecting strong market concerns regarding its financial health.
- Downgrade Risks: On March 2, 2026, Raymond James downgraded AeroVironment from Strong Buy to Underperform, primarily due to uncertainties surrounding the U.S. Space Force's SCAR program, which poses significant risks to future revenue streams.
See More
AI Becomes A Core Military Capability
- Defense Contract Expansion: Palantir secured a $480 million U.S. Department of Defense contract in 2024 to develop the Maven Smart System, which integrates satellite imagery, drone feeds, and battlefield intelligence into decision-making systems, enhancing military operational efficiency.
- Contract Value Surge: In 2025, the U.S. Army added a $795 million contract modification for Palantir, with the broader framework agreement potentially worth up to $10 billion over the next decade, solidifying Palantir's central role in AI-driven military intelligence.
- Space Defense Layer Development: Rocket Lab won an $816 million U.S. Space Force contract in 2025 to design and manufacture 18 satellites equipped with sensors for missile warning and tracking systems, supporting the Pentagon's initiative to build a large constellation of defense satellites.
- Rising Drone Demand: Drone manufacturer AeroVironment, Inc. benefits from increasing demand for unmanned and loitering munitions systems used by U.S. forces and allies, indicating a shift in defense spending towards AI software, satellites, and autonomous systems.
See More
AeroVironment Set to Announce Q3 Earnings on March 10
- Earnings Announcement Schedule: AeroVironment (AVAV) is set to announce its Q3 earnings on March 10 after market close, with consensus estimates predicting an EPS of $0.69 and revenue of $475.65 million, indicating investor interest in the company's performance.
- Performance Expectations Analysis: Over the past two years, AVAV has beaten EPS estimates 50% of the time and revenue estimates 88% of the time, although recent downward revisions of EPS estimates by 10 times suggest a cautious market outlook on the company's future performance.
- Revenue Estimate Changes: While there has been one upward revision in revenue estimates, there have also been 12 downward revisions, reflecting analysts' concerns about the company's revenue growth potential, which may impact investor confidence.
- Military Contract Approval: AeroVironment recently secured a $97.4 million contract from the U.S. Army to advance next-gen sensor testing, which not only strengthens the company's order book but also potentially provides funding for future technological advancements.
See More
AeroVironment Q4 Preview: $1.4B Problem
- Earnings Preview Miss: AeroVironment's projected non-GAAP EPS of $0.64 for Q4 falls short by $0.05, indicating significant pressure on profitability that could undermine investor confidence.
- Revenue Shortfall: The anticipated revenue of $408.05 million is $67.6 million below analyst expectations, which may adversely affect the company's liquidity and future investment plans.
- Negative Market Reaction: The disappointing earnings forecast could lead to downward pressure on AeroVironment's stock price, prompting investors to closely monitor how the company addresses its current financial challenges to restore market confidence.
- Uncertain Industry Outlook: Despite the substantial potential in the drone and laser technology markets, AeroVironment's performance does not reflect this growth trend, suggesting a need for a reassessment of its market strategy to adapt to industry changes.
See More
AeroVironment Q3 Earnings Miss Expectations
- Earnings Miss: AeroVironment reported a Q3 non-GAAP EPS of $0.64, missing expectations by $0.05, indicating pressure on profitability that could undermine investor confidence.
- Revenue Growth Below Expectations: The company achieved revenue of $408.05 million in Q3, a 143.5% year-over-year increase, yet fell short of market expectations by $67.6 million, reflecting challenges from intensified market competition and demand fluctuations.
- Fiscal 2026 Outlook Downgraded: AeroVironment now anticipates fiscal year 2026 revenue between $1.85 billion and $1.95 billion, below the consensus of $1.96 billion, signaling a cautious outlook on future growth.
- Increased Net Loss Projections: The company expects a net loss between $218 million and $201 million, with diluted loss per share projected between $4.44 and $4.10, highlighting the financial pressures faced during its expansion efforts.
See More
AeroVironment Reports Earnings Miss and Revenue Guidance Cut
- Earnings Performance: AeroVironment reported quarterly earnings of 64 cents per share, missing the consensus estimate of 69 cents, indicating pressure on profitability that may affect investor confidence.
- Revenue Shortfall: The quarterly revenue of $408.05 million fell short of the Street estimate of $475.63 million by 14.21%, highlighting challenges in sales growth for the company.
- Orders and Backlog: Despite the revenue miss, AeroVironment achieved bookings of $2.1 billion and a funded backlog of $1.1 billion, significantly up from $726.6 million year-over-year, indicating strong future growth potential.
- Outlook Adjustment: The company lowered its fiscal 2026 adjusted EPS guidance to a range of $2.75 to $3.10, below the analyst estimate of $3.31, reflecting a cautious outlook on future performance.
See More
AeroVironment Faces Securities Fraud Investigation Amidst Poor Earnings
- Earnings Miss: AeroVironment reported earnings per share of only $0.44 for Q2 of fiscal 2026, significantly below the consensus estimate of $0.80, resulting in a major setback in financial performance that undermines investor confidence.
- Plummeting Gross Margins: The company's gross margins fell sharply from 43% in the prior year to 20.9%, with cost of goods sold surging to 79% of revenue, indicating severe cost control issues that could lead to ongoing profitability challenges.
- Stock Price Collapse: Following the earnings report, AeroVironment's stock price plummeted by $36.17, or 12.85%, on December 10, 2025, reflecting strong market concerns regarding its financial health.
- Downgrade Risks: On March 2, 2026, Raymond James downgraded AeroVironment from Strong Buy to Underperform, primarily due to uncertainties surrounding the U.S. Space Force's SCAR program, which poses significant risks to future revenue streams.
See More
AI Becomes A Core Military Capability
- Defense Contract Expansion: Palantir secured a $480 million U.S. Department of Defense contract in 2024 to develop the Maven Smart System, which integrates satellite imagery, drone feeds, and battlefield intelligence into decision-making systems, enhancing military operational efficiency.
- Contract Value Surge: In 2025, the U.S. Army added a $795 million contract modification for Palantir, with the broader framework agreement potentially worth up to $10 billion over the next decade, solidifying Palantir's central role in AI-driven military intelligence.
- Space Defense Layer Development: Rocket Lab won an $816 million U.S. Space Force contract in 2025 to design and manufacture 18 satellites equipped with sensors for missile warning and tracking systems, supporting the Pentagon's initiative to build a large constellation of defense satellites.
- Rising Drone Demand: Drone manufacturer AeroVironment, Inc. benefits from increasing demand for unmanned and loitering munitions systems used by U.S. forces and allies, indicating a shift in defense spending towards AI software, satellites, and autonomous systems.
See More
