AeroVironment (AVAV) shares ripped higher on Tuesday after the defense-tech contractor reported better-than-expected financials for its fiscal Q4.
The company posted record revenue of about $642 million — more than double last year’s figure — on $1.84 a share of adjusted earnings per share (EPS).
Despite the post-earnings rally, however, AeroVironment stock remains down more than 55% versus its year-to-date high.
What’s Driving AeroVironment Stock Higher Today?
Investors are also cheering AVAV stock because of the strong order momentum. The Nasdaq-listed firm ended its Q4 with $1.2 billion of funded backlog — up a whopping 65% year-over-year.
For investors, this means rock-solid operational visibility well into fiscal year 2027. Importantly, including an additional $1.5 billion in unfunded backlog, AeroVironment sits on an incredible $2.7 billion pipeline.
AVAV’s fast-growing backlog suggests it is well-positioned to continue scaling its manufacturing capacity to meet the global pent-up demand for uncrewed defense systems.
Note that AeroVironment now sits just below its 20-day moving average (MA), with a firm break above $169 expected to accelerate bullish momentum in the near term.
AVAV Shares Aren’t Inexpensive to Own
AeroVironment shares are soaring also because the company’s adjusted EBITDA margin expanded to 22% in the fourth quarter, signaling robust demand for its proprietary high-margin products like Switchblade.
Moreover, the firm’s recent acquisition of BlueHalo for over $4 billion strengthens its advanced capabilities in counter-UAS platforms and space tech as well.
Still, former hedge fund manager Jim Cramer recommended caution in playing AVAV at the current price primarily because the “short sellers in this thing are so powerful.”
Investors should also note that the drone company is currently trading at a forward price-to-earnings (P/E) of roughly 37x, which means it’s even more expensive to own currently than the AI stock Nvidia (NVDA).
Wall Street’s View on AeroVironment
That said, Wall Street analysts remain bullish as ever on AVAV shares for the remainder of 2026.
According to Barchart, the consensus rating on AeroVironment sits at “Strong Buy” currently, with the mean price target of about $295 indicating potential upside of more than 70% from here.
