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AeroVironment rated Buy on strong AxS growth and key contracts despite recent share weakness.

Analyst Insights
12 Sep 2026
Seeking Alpha
View Source
Bullish
AeroVironment rated Buy on strong AxS growth and key contracts despite recent share weakness.

AeroVironment is rated a Buy due to strong growth in its AxS segment, driven by unmanned aerial systems (UAS) and precision strike and defense systems (PSDS). The SCDE segment underperforms but holds long-term potential through contracts like LOCUST and Titan. Management's guidance for fiscal year 2027 depends on improving EBITDA margins in the second half, fueled by high-margin LOCUST commercialization and better product mix. Risks include heavy reliance on government contracts, execution challenges, negative free cash flow, and the need for SCDE to become profitable.

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