AeroVironment drops 3.4% as analysts flag execution risk on $4B target

AeroVironment Inc. shares fell 3.4% to $143.36 after analysts downgraded the stock on execution risk tied to a $4 billion fiscal 2030 revenue target.

"The targets imply a 15% to 20% compound annual growth rate from fiscal 2026 levels that we view as ambitious given flat real defense budgets," RBC Capital analysts wrote.

The Monrovia, California-based defense technology company targets $3.5 billion to $4 billion in revenue by fiscal 2030, nearly doubling the roughly $2 billion reported for fiscal 2026. Adjusted EBITDA margins are expected to reach 18% to 20% by fiscal 2030, up from 14.5% in fiscal 2026. Fiscal 2027 capital expenditures will run 12% to 14% of revenue — about $300 million — to expand manufacturing capacity across facilities in New Mexico, Utah, Alabama and California.

The downgrades pushed the stock near its 52-week low of $135.20, extending a 38% year-to-date decline. Short interest stands at 12.6% of the float, representing about 4.8 million shares with a days-to-cover ratio of 4.6. The company holds a $2.7 billion total backlog, including $1.2 billion in funded orders, and recently secured a $500 million sole-source contract for the U.S. Army's Domestic Shield counter-UAS program with an $80.5 million initial delivery order.

The sell-off creates a disconnect between price and fundamentals for a company already generating 22% adjusted EBITDA margins in the fiscal fourth quarter, above the 18% to 20% target range for 2030. Investors will watch upcoming quarterly results for evidence of backlog conversion and margin progression as the company executes its investment cycle through fiscal 2027.

This article is for informational purposes only and does not constitute investment advice.