AeroVironment (AVAV) Stock on December 10, 2025: Record Q2 Revenue, $874M Army Deal and Fresh Wall Street Targets

AeroVironment, Inc. (NASDAQ: AVAV), the U.S. drone and defense technology specialist, is in focus on 10 December 2025 after delivering record fiscal Q2 2026 revenue, raising its full‑year sales outlook and securing an $874 million U.S. Army contract, even as the share price trades far below its October peak. ^[1]

This piece pulls together the latest news, earnings, guidance, analyst forecasts and price targets available as of December 10, 2025, to help investors understand what is really happening with AeroVironment stock right now.

Where AeroVironment Stock Stands Today

As of the latest close on December 9, 2025, AeroVironment shares finished at $281.42, down 0.37% on the day. ^[2]

That level is:

Roughly one-third below the stock’s record high of $417.86 set on October 9, 2025. ^[3]
Still around 80%+ higher year‑to‑date, based on multiple data providers that peg 2025 gains between roughly 80% and 83%. ^[4]

Options and volatility metrics underline how charged the trade has become. Schaeffer’s Research recently highlighted that:

YTD gains exceeded 80%.
The $260 area has acted as a key support zone in the latest pullback.
Options activity and volatility scores suggest traders have consistently underestimated how far the stock can swing. ^[5]

On TipRanks, the stock carries a market cap of about $14.1 billion, average daily trading volume just over 1 million shares, and a “Buy” technical signal, after returning roughly 80% year to date. ^[6]

In short: AeroVironment has already had a huge 2025, but the shares have cooled sharply since October as investors digest acquisition noise, guidance tweaks and macro uncertainty.

Fiscal Q2 2026: Record Revenue, GAAP Loss

For the second quarter of fiscal 2026, ended November 1, 2025, AeroVironment reported the largest quarterly revenue in its history:

Revenue: $472.5 million
- Up 151% from $188.5 million a year earlier.
- Driven by higher product sales and contract services. ^[7]
BlueHalo contribution: the BlueHalo acquisition (closed May 1, 2025) contributed about $134.4 million of product revenue and $110.7 million of service revenue in the quarter — almost half of total sales. ^[8]

Despite that explosive top‑line growth, earnings told a more complicated story:

Gross margin: $104.1 million, up from $73.6 million a year earlier, but pressured by a sharp increase in non‑cash amortization of acquired intangibles (around $24.2 million this quarter vs. $3.7 million a year ago). ^[9]
Operating income: swung to a loss of $30.2 million, compared with positive $7.0 million in the prior‑year quarter. Most of that swing reflects about $48.2 million in intangible amortization and purchase‑accounting expenses versus $4.8 million a year ago. ^[10]
Net income: a GAAP net loss of $17.1 million, or ‑$0.34 per diluted share, versus net income of $7.5 million ($0.27 per share) in the prior year. ^[11]

On a non‑GAAP basis, the picture is less severe but still mixed:

Adjusted EBITDA: about $45 million, up from $25.9 million a year earlier. ^[12]
Non‑GAAP EPS:$0.44, slightly below the $0.47 posted a year earlier and well under analyst expectations near $0.79, implying more than a 40% earnings miss. ^[13]

Backlog and bookings show how much business is in the pipeline:

Funded backlog: about $1.1 billion as of November 1, 2025, up from roughly $726.6 million at April 30, 2025. ^[14]
Management also referenced record bookings around $1.4 billion in the quarter, driven by both legacy AeroVironment products and the expanded portfolio from BlueHalo. ^[15]

So the quarter’s headline is straightforward: massive revenue scale‑up, but GAAP profitability squeezed by acquisition-related accounting and operational friction.

Guidance: Revenue Raised, EPS Trimmed and a Heavy Q4

Investors care as much about guidance as they do about the last quarter — and here AeroVironment sent a mixed signal.

Updated Fiscal 2026 Outlook

Across its recent filings and commentary, AeroVironment now expects for fiscal 2026: ^[16]

Revenue:$1.95–$2.0 billion
- Midpoint around $1.98 billion, slightly above its previous range but about 1% below consensus expectations.
Non‑GAAP EPS:$3.40–$3.55
- Midpoint around $3.47, below earlier guidance and below the roughly $3.65 analysts were modeling.
Adjusted EBITDA: guidance around $300–$320 million, with some estimates pointing to a midpoint near $310 million, a touch below Street expectations. ^[17]

Analysts and news outlets framed this as “strong revenue, softer profitability” guidance. AeroVironment is clearly signalling confidence in demand, but also acknowledging pressure on margins and earnings per share.

Why So Much Weight on Q4?

Both management and analysts emphasize that fiscal Q4 is doing a lot of the heavy lifting:

The company said that about 55% of second‑half revenue is expected to land in Q4. ^[18]
Piper Sandler notes that roughly 70% of second‑half EBITDA dollars are expected in Q4, making full‑year profitability especially sensitive to execution in that quarter. ^[19]

Several factors are converging here:

A 43‑day U.S. federal government shutdown during the quarter delayed certain task orders and foreign military sales approvals, pushing revenue and profit into the back half of the year. ^[20]
The rollout of a new Oracle Fusion ERP platform created temporary operational inefficiencies that are expected to fade over coming quarters. ^[21]
The revenue mix is gradually shifting toward higher‑margin product sales and away from lower‑margin services, but that improvement is back‑loaded.

Management insists it is on track to meet fiscal 2026 guidance, but openly acknowledges timing risk around when delayed task orders and funding flows will actually hit. ^[22]

Strategic Momentum: $874M Army Deal, BlueHalo and AV_Halo

Beyond quarterly numbers, AeroVironment is rapidly repositioning itself as a scaled, all‑domain defense technology platform.

The $874M Foreign Military Sales IDIQ

On December 8, 2025, AeroVironment announced a five‑year, $874.26 million IDIQ contract from the U.S. Army Contracting Command that will support foreign military sales of its drones and counter‑drone systems to allied and partner nations. ^[23]

The contract covers a portfolio of systems including:

JUMP 20™ VTOL fixed‑wing UAS
P550™ electric Group 2 eVTOL
Puma™ tactical UAS
Raven™ small UAS
Titan™ RF‑based counter‑UAS solution ^[24]

This is not an immediate $874M revenue check — it’s an ordering vehicle that allies can use to buy AeroVironment systems over time. But it materially strengthens the company’s position in long‑term international UAS and C‑UAS demand.

BlueHalo Acquisition and the AV_Halo Software Stack

The acquisition of BlueHalo earlier in 2025 dramatically expanded AeroVironment’s footprint in space, cyber, directed energy and advanced sensing. BlueHalo is now contributing a large share of Q2 revenue and is central to the company’s software‑driven strategy. ^[25]

At the center of that strategy is AV_Halo, a modular AI‑powered software suite that links AeroVironment platforms and third‑party systems into a common command and control layer. Management compares AV_Halo to an “office suite” of modular applications that can be combined and extended for different missions — all built on an open architecture designed to integrate with other vendors’ systems and battle‑management networks. ^[26]

Analyst commentary from Citizens and others sees the combination of BlueHalo hardware, AeroVironment’s legacy drones and the AV_Halo software stack as a scalable “design‑to‑production engine” across air, space and cyber domains, with a total addressable market they estimate at more than $50 billion. ^[27]

Why the Share Price Is Under Pressure After Record Sales

Given record revenue, a blockbuster IDIQ, and raised sales guidance, why has the stock pulled back so sharply from its highs?

Recent coverage from Barron’s, TipRanks, StockStory and Investing.com points to a few recurring themes: ^[28]

Earnings and margin disappointment vs. expectations
- Non‑GAAP EPS came in far below Street estimates, and adjusted EBITDA also missed, despite the top‑line beat.
- Operating margins flipped negative, reflecting heavy non‑cash amortization and elevated SG&A and R&D as the company integrates BlueHalo and ramps capacity.
Guidance quality: revenue up, profit down
- AeroVironment raised its revenue outlook but lowered or undercut EPS expectations, signalling that in the near term, growth will come with margin pressure.
Cash flow and working capital concerns
- Analysts highlight rising inventories and unbilled receivables, as the company builds ahead of anticipated task orders and service milestones. Management says it expects significant improvement in cash conversion in the second half, but investors want proof. ^[29]
Concentrated execution risk in Q4
- With such a large share of EBITDA and revenue expected in the final quarter, any delay in government funding, contract awards or factory ramp‑up could ripple through the full‑year numbers.

TipRanks summarized the situation bluntly: the stock is volatile because investors are balancing strong revenue growth and strategic acquisitions against missed earnings, cash‑flow worries and slightly reduced price targets — while still acknowledging a positive long‑term outlook for drones and autonomous defense systems. ^[30]

Wall Street Sentiment: Still a “Strong Buy,” But Targets Are Spreading Out

Despite the recent wobble, Wall Street remains broadly bullish on AeroVironment.

Analyst Rating Snapshot (as of 10 December 2025)

TipRanks: 15 analysts over the past three months, all rating AVAV a “Buy”, giving the stock a “Strong Buy” consensus. ^[31]
StockAnalysis: 14 covering analysts with an overall “Strong Buy” rating. ^[32]
GuruFocus: 16 brokerage firms contribute to an average recommendation around 1.6 on a 1–5 scale, corresponding to “Outperform”. ^[33]

Key Recent Price Target Moves

Recent days have been busy:

Needham – Reiterated “Buy” with a $450 price target on December 10, 2025. ^[34]
Piper Sandler – Reiterated “Overweight” with a $391 target; sees strong revenue momentum but emphasizes delayed orders, margin pressure and a very Q4‑heavy EBITDA profile. ^[35]
RBC Capital – Maintained “Outperform”, trimming its target from $440 to $400 on December 8. ^[36]
BTIG – Reiterated “Buy” with a $415 target in late November. ^[37]
Canaccord Genuity – Kept a “Buy” rating but raised its target from $305 to $430 in October, while recently flagging margin pressures. ^[38]
Citizens – Reiterated “Market Outperform” with a $400 target on December 10, citing global defense tailwinds, a powerful international base and BlueHalo synergies. ^[39]
Cantor Fitzgerald – Cut its price target to $315 earlier today, reflecting disappointment in adjusted EBITDA and free‑cash‑flow trajectory. ^[40]

Across multiple aggregators:

StockAnalysis lists an average 12‑month target around $370, with a range from $275 to $450, implying roughly 30% upside from recent prices. ^[41]
TipRanks cites an average nearer $386–$387, with a high target of $486 and a low around $300. ^[42]
GuruFocus calculates a slightly higher average target of about $401, with the high end again at $486 and a low in the mid‑$330s, indicating roughly 40% upside from around $281. ^[43]

At the same time, GuruFocus’ proprietary GF Value model estimates AeroVironment’s fair value at roughly $258, about 8% below the current price — a reminder that not all valuation lenses agree. ^[44]

Growth Forecasts and Valuation

Analysts are effectively betting that AeroVironment can convert today’s contract wins and acquisitions into sustained, profitable growth.

Street Forecasts

Based on the consensus compiled by StockAnalysis for the fiscal years around 2026–2027: ^[45]

Revenue 2026: about $2.04 billion, up roughly 148% from around $820 million in 2025 (reflecting both organic growth and BlueHalo).
Revenue 2027: around $2.39 billion, implying ~17% growth on top of 2026’s step‑change.
EPS 2026: forecast around $3.71, up from $1.55 in 2025.
EPS 2027: expected to reach roughly $4.57, another ~23% increase.

These are big moves for what was, until recently, a mid‑cap drone manufacturer.

Multiples

Those growth forecasts help explain why the stock still trades at rich multiples:

Forward P/E: StockAnalysis calculates a multiple around 76x the current year’s expected EPS, falling to roughly 62x next year’s estimate at recent prices. ^[46]
Other valuation models, like InvestingPro’s and GuruFocus’ GF Value, suggest the shares may be ahead of their fundamental fair value in the near term, even if long‑term growth looks attractive. ^[47]

Put differently: the market is still pricing AeroVironment as a fast‑growing, premium defense platform, not a slow‑and‑steady contractor.

Key Upside Catalysts

From the latest news and management commentary, a few potential upside drivers stand out:

Conversion of Backlog and IDIQs to Revenue
- The combination of $1.1 billion in funded backlog and the new $874 million FMS IDIQ gives AeroVironment substantial visibility. Faster‑than‑expected order flow from allies could surprise the market on both revenue and margin. ^[48]
Margin Recovery as Mix Shifts to Products
- Management repeatedly points to a shift toward higher‑margin precision‑strike and counter‑UAS products (Switchblade, P550, JUMP 20, Titan) as a key reason to expect margin improvement in the second half and into 2027. ^[49]
BlueHalo Synergies and Software Scale
- The BlueHalo combination and AV_Halo software stack create opportunities in space, cyber and AI‑driven mission systems that go beyond AeroVironment’s legacy drone niches. Analysts at Citizens and Piper see this as a multi‑year growth engine aligned with U.S. and allied defense priorities. ^[50]
Manufacturing Expansion
- The company is ramping a new facility in Salt Lake City designed to handle over $2 billion in annual product value, which should support larger orders and potentially better operating leverage once utilization rises. ^[51]
Diversification Beyond Ukraine
- Management notes that Ukraine now represents less than 5% of full‑year revenue, with guidance assuming no incremental Ukraine orders — meaning any new contracts from that theater would be upside, while the business is increasingly diversified across NATO and Indo‑Pacific customers. ^[52]

Risks and Pressure Points

On the flip side, recent analysis also flags several noteworthy risks:

Execution and Timing Risk
- With so much revenue and EBITDA expected in Q4, delays in government appropriations, task orders or foreign military sales could hit both near‑term earnings and investor confidence. ^[53]
Integration and Operational Complexity
- Incorporating BlueHalo, rolling out a new ERP system and scaling multiple manufacturing sites simultaneously increases operational risk. Margin pressure this quarter shows how easily complexity can erode profitability. ^[54]
Cash Flow and Working Capital
- Elevated inventories, unbilled receivables and front‑loaded production for anticipated task orders mean free cash flow may lag earnings in the near term. Management is targeting better than 50% cash conversion of EBITDA for the year, but that still needs to be demonstrated. ^[55]
Valuation Risk
- Even after the recent sell‑off, AVAV trades at high forward multiples, and at a premium to some fair‑value models. If revenue or margin growth slows, multiple compression could weigh heavily on returns. ^[56]
Macro and Political Risk
- AeroVironment is deeply tied to U.S. and allied defense budgets, which are currently a tailwind but remain subject to politics, including government shutdowns and shifting priorities. ^[57]

Bottom Line for AeroVironment (AVAV) Investors

As of December 10, 2025, AeroVironment sits at an interesting crossroads:

Fundamentals: Record revenue, surging backlog, a transformative acquisition in BlueHalo and a very large new FMS contract support the story of a defense tech company scaling rapidly into multiple domains. ^[58]
Financials: Profitability has been dented by integration costs, heavy non‑cash amortization and operational growing pains, with a lot riding on a powerful but risky Q4. ^[59]
Market view: The stock has pulled back roughly a third from its October record high but remains up strongly year‑to‑date. Analysts still cluster around “Strong Buy”, with average price targets 30–40% above current levels, while some valuation models flash caution. ^[60]

For investors, AeroVironment now looks like a high‑growth, high‑expectations defense platform: richly valued, strategically well‑positioned and operationally more complex than in the past. Future returns are likely to hinge on execution — especially on margin recovery, cash‑flow improvement and the conversion of its swelling backlog into profitable revenue.