AeroVironment (AVAV) Stock Forecast & Price Target

AeroVironment is well positioned because its core Autonomous Systems franchise has deep installed-base demand, recurring sustainment revenue, and exposure to the Pentagon’s shift toward attritable, mass-producible autonomous warfare. The BlueHalo acquisition broadened the company into layered counter-UAS, and funded production wins such as the $464.8 million E-HEL LOCUST award, the $80.5 million Titan order, and the $95.9 million Freedom Eagle-1 award improve visibility as backlog reached $1.46 billion at the end of 1Q27, with roughly 78% expected to convert in FY27. Although SCDE losses and the $241 million goodwill impairment weighed on FY26, revenue is forecast at $2.20 billion in FY27 and $2.58 billion in FY28, with EBITDA and EPS expanding as production ramps and operating leverage improves.

AeroVironment is facing a negative outlook because the BlueHalo acquisition has not delivered as expected, with SCAR’s termination, a goodwill impairment, a restatement, and internal-control weaknesses undermining confidence in SCDE’s pipeline and execution. The company is also burdened by weak cash generation, as fiscal 1Q27 showed an $8.9 million adjusted EBITDA loss in SCDE, negative operating cash flow of $78 million, negative free cash flow of $165 million, and working capital rising to $969.4 million as inventories and unbilled receivables built ahead of delivery milestones. Competitive pressure and program risk further cloud the story, since low-end UAS markets are commoditizing, C2 control is shifting to rivals, and delays in programs like FE-1 or acceptance issues in directed energy could limit growth and profitability.