AVEX Initiation Feedback: Focus on Differentiation & Ability to Win at Scale

Research evidence excerpt

AVEX Initiation Feedback: Focus on Differentiation & Ability to Win at Scale

USA | Aerospace & Defense Electronics

Aevex EquityMayResearch20, 2026

COMPANY UPDATEAVEX Initiation Feedback: Focus on

RATING BUYDifferentiation & Ability to Win at Scale

PRICE $26.33^

Following our Aevex initiation at Buy with a $32 PT based 27X 2027 EBITDA of

$124MM, investor feedback has focused on: 1) Back-filling Ukraine revenues PRICE TARGET | % TO PT $32.00 | +22%

from 50%+ of revs in 2025/2026 on JEFe to only MSD contribution in 2027; 52W HIGH-LOW $42.34 - $22.27

2) size & timing of backlog conversion and opportunity pipeline (DoW Drone FLOAT (%) | ADV MM (USD) 16.6% | 89.42

Dominance); 3) the UxS competitive landscape and how AVEX differentiates; MARKET CAP $2.9B

and 5) relative valuation to peers. Earnings AMC today (May 20th). TICKER AVEX ^Prior trading day's closing price unless otherwise

noted.

1) Debate: Drivers of 2027E Revenue Growth as Ukraine Contribution Falls to MSD Contribution

AVEX delivered over 4,400 units to Ukraine through the Phoenix Ghost program, with delivery & FY (Dec) CHANGE TO JEFe JEF vs CONS

in-field performance paving the way to sell to the US gov't and other international partners such 2026 2027 2026 2027

as the ~$645MM EUCOM AOR Deep Strike contract for 2024-2026. On our estimates, Ukraine REV NA NA NA NA

falls from 50%+ of revenue in 2025/2026 to a MSD % contribution in 2027, compared to total EPS NA NA NA NA

revenue increasing 36% in 2026 and another 16% in 2027 to $682MM in revenue. Growth is

driven by capacity for Ukraine/EUCOM transitioning to programs of record and int'l pursuits led 2026 ($) Q1 Q2 Q3 Q4 FY

by products such as Atlas (Group II Autonomous Precision Strike System), Disruptor (Group III EPS 0.18 0.01 0.05 0.06 0.30