TLDR
- AeroVironment stock rose 10.7%, closing at $190.89 on Thursday
- The U.S. Army awarded AVAV a $500 million fixed-price contract for counter-drone systems
- Analyst Louie DiPalma (William Blair) believes the contract is for the TITAN C-UAS system
- The win follows recent setbacks including a canceled SCAR contract and a June accounting error
- AVAV revenue surged 133% year over year to $642 million in its most recent quarter
AeroVironment had a rough few months heading into Thursday. The stock had fallen from above $392 to below $140 following a canceled government contract and a disclosed accounting error in June. So a 10.7% jump — closing at $190.89 — on the back of a $500 million Army contract was well-timed.
The U.S. Army awarded AeroVironment a fixed-price contract for “the procurement of commercial counter-unmanned aerial systems and counter-small-unmanned aerial systems capabilities,” according to a government news release. The contract is projected to run through June 29, 2029.
William Blair analyst Louie DiPalma said the company’s TITAN system is likely behind the deal. TITAN uses radio frequency technology to disable drone threats and is small enough to deploy in under five minutes.
DiPalma noted that TITAN orders more than doubled in fiscal 2026, according to AeroVironment management.
What’s in the Pipeline
Beyond TITAN, AeroVironment has more potentially big wins on the horizon. Management has expressed confidence that its LOCUST high-energy laser system could secure a production contract within three months. LOCUST uses AI-powered targeting and costs less than $5 per shot to operate.
The Freedom Eagle-1 counterdrone missile interceptor system is also expected to be in line for a production contract in fall 2027.
The backdrop for all of this is straightforward: conflicts in Ukraine and the Middle East have put drone and counter-drone technology front and center for defense planners worldwide.
Context: A Rocky Road to Recovery
The recent history here matters. The U.S. government canceled the BADGER phased-array antenna contract tied to the SCAR satellite program earlier this year. When AeroVironment disclosed an accounting error related to SCAR asset write-downs on June 22, the stock was already deep in recovery mode.
AVAV was trading above $392 when the initial stop-work order hit. It dropped to around $150 before the accounting error disclosure, then fell further below $140 before this week’s Q4 earnings — which came in better than expected.
Thursday’s move brings the stock back above $190.
On the revenue side, AeroVironment posted $642 million in its most recent quarter, up 133% year over year. Autonomous systems revenue drove the bulk of that, rising 79% to $492 million.
The $500 million Army contract adds to what is shaping up as a meaningful order recovery for the company.
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