AeroVironment (AVAV) stock extended gains on Sept. 15 after the company’s BlueHalo unit landed a landmark defense contract potentially worth up to $99.8 million. In its press release, AVAV said this new U.S. Air Force award — designed to advance military space systems under the Leveraged Orbital Battlespace Optimization program — runs through August 2031.
The announcement arrives as AeroVironment shares are struggling to regain investor interest, currently down more than 60% versus their year-to-date high.
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www.barchart.comSignificance of the New Contract for AVAV Shares
With initial task orders starting at $20.2 million, the Air Force contract highlights how effectively AeroVironment is scaling beyond tactical drones into space-based defense platforms and directed energy.
Coming shortly after a separate $465 million U.S. Army counter-UAS laser award, the company’s growing backlog provides long-term revenue visibility, proving that demand for its mission-critical hardware remains resilient despite macro volatility.
In short, AVAV shares rallied on the disclosure as it reinforces the firm’s footprint in defense-tech and secures its top-line growth for the years to come.
Note that AeroVironment has a history of gaining over 6% on average in October, a seasonal trend that further improves its near-term appeal.
Should You Load Up on AeroVironment Stock Today?
Trading miles below its 52-week high, AeroVironment shares currently present a compelling risk-reward for long-term growth-focused investors.
At the time of writing, the company is trading at a price-to-sales (P/S) ratio of about 3.7x, notably below its five-year historical average of roughly 5x.
On the flip side, however, options market sentiment is dovish for the near term.
The put-to-call ratio on contracts expiring mid-October sits at 1.24x currently, indicating a bearish skew, and the lower price on those contracts set at about $133 signals potential downside of about 13% from here.
How Wall Street Recommends Playing AeroVironment
Investors should take heart that Wall Street analysts do not agree with the derivatives market’s pessimism on AeroVironment.
According to Barchart, the consensus rating on AVAV stock remains at “Strong Buy,” with the mean price target of about $237 indicating potential upside of roughly 55% from current levels.
www.barchart.com On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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