AxS Rebound and Appetite for Expansion Paints Healthy Demand Picture for FY27

Research evidence excerpt

AxS Rebound and Appetite for Expansion Paints Healthy Demand Picture for FY27

C O M PA N Y N O T E

J u n e 3 0 , 2 0 2 6

AeroVironment, Inc. (AVAV) Overweight

CONCLUSION PRICE: US$139.00

AeroVironment closed out FY26 with a very healthy showing in Autonomous Systems TARGET: US$248.00

with y/y growth rebounding from 25% last quarter to 49% in 4Q26 (>40% ex-ESAero). Based on a five year forecast with terminal

AV also netted their first positive OCF quarter since 1Q25 on operational improvements EBITDA multiple of 20x, discounted back by

including streamlining the customer acceptance process for Switchblade. Looking to FY27 10%, and assuming ~$140M of net debt & 50M

the company's appetite for capacity expansion is clear with CapEx intensity rising to 12-14% shares outstanding.

of revenue from 5% in FY26 with the headline programs ramping in FY27: 100,000 sq. ft.

Clarke Jeffriesfacility in Salt Lake City (to begin production in spring 2027 and reach $2B+ annual capacity Sr. Research Analyst, Piper Sandler & Co.

during CY27), LOCUST transitioning to full-rate production in FY27, Red Dragon production 503 275-8318, clarke.jeffries@psc.com

levels expanding to meet significant demand over the next 12 months, and the Freedom

Changes Previous CurrentEagle-1 program being fast tracked to market with testing in 12 months and manufacturing

Rating — Overweight

to follow. AVAV is seeing clear demand and investing behind the opportunity. Price Tgt — US$248.00

FY26A Rev (mil) US$1,900.2 US$1,976.8

• 4Q26 Results | 31% y/y organic revenue growth & 21.8% adjusted EBITDA margins. FY27E Rev (mil) US$2,146.9 US$2,174.6

AeroVironment reported $641.6M in revenue (vs consensus of $556.0M), representing FY26A EPS US$2.91 US$3.28

30% pro forma revenue growth and 31% organic growth.