---
title: "AeroVironment (AVAV) lands a multiyear U.S. customer contract as profits trail"
canonical_url: https://www.stockexpertai.com/journal/2026-11-10/aerovironment-avav-lands-a-multiyear-u-s-contract-while-profits-still-trail-d64bd5a8b509
last_updated: 2026-11-11T04:16:36.193Z
section: "Sector Spotlight"
author: "Stock Expert AI Research"
publisher: Stock Expert AI
tickers: AVAV
content_type: journal-article
---

# AeroVironment (AVAV) lands a multiyear U.S. customer contract as profits trail

_A new indefinite-delivery contract adds visibility for AeroVironment, but the latest quarter still showed a net loss and negative free cash flow._

![Data cover: AeroVironment (AVAV) lands a multiyear U.S. customer contract as profits trail](/public-objects/streetnews/2026-11-10/SECTOR_SPOTLIGHT-cover-dca6ca79.jpg)
Stock Expert AI data cover: figures from Financial Modeling Prep; background is an illustrative public-domain photo, credited on the image.

A new multiyear contract with a U.S. customer gives AeroVironment (AVAV) a large potential order pipeline, but its financials are still catching up. In the first quarter of fiscal 2027, ended Aug. 1, 2026, the company posted revenue of $480.5M, above the analyst estimate, along with a net loss of $5.1M. Figures are current as of Nov. 10, 2026.

## Key facts

- **Nov. 9, 2026:** according to its release, the company announced a multiyear indefinite-delivery, indefinite-quantity (IDIQ) contract with a U.S. customer. An IDIQ sets a ceiling on how much the customer may order over time, and the company said the deal includes an initial award for product deliveries and support. The company said the work will run through its AxS segment.
- **Nov. 10, 2026:** the stock traded at 123.5 USD on the latest quote, a change of -2.73%. The 52-week range is 100.4-408.25 USD.
- **Sept. 9, 2026:** the company reported EPS of 0.59 USD against an analyst estimate of 0.2223 USD, a difference of +$0.37, or 165.4%. Revenue of $480.5M compared with an estimate of $451.9M, a difference of +$28.5M, or 6.3%.
- **Dec. 8, 2026:** next earnings date. The analyst EPS estimate is 0.4175 USD and the revenue estimate is $510.6M.
- **Market cap:** $6.28B.

| Metric | Q1 FY2027 (ended Aug. 1, 2026) | Q1 FY2026 (ended Aug. 2, 2025) |
|---|---|---|
| Revenue | $480.5M | $454.7M |
| Operating income | -$10.9M | -$69.3M |
| Net income | -$5.1M | -$67.4M |
| Diluted EPS | -0.1 USD | -1.44 USD |

## What happened

**The theme: demand for uncrewed and precision defense systems.** Governments buy drones, loitering munitions and related systems under long-term framework contracts. An IDIQ contract does not commit the customer to buy the full ceiling. It sets the maximum and, in general, lets the customer place orders in stages. For a supplier, that can improve visibility on future sales, but actual revenue depends on the orders placed and on when products ship.

AeroVironment's Nov. 9 release is a concrete example. The company said the contract has a large ceiling and an initial award for product deliveries and support, and that it will help it keep delivering advanced capabilities through its AxS segment and extend established product lines. The release does not name the customer beyond calling it a U.S. customer, and it does not say when the rest of the ceiling might be ordered; that timing is the key unknown.

**Where the business stands.** The company reported revenue of $480.5M in the quarter ended Aug. 1, 2026, higher than $454.7M a year earlier. The net loss narrowed from $67.4M a year earlier to $5.1M. FMP reports that net income improved 92.5% versus the year-ago quarter, and revenue rose 5.7%.

By segment, FMP data for the quarter shows:

- Precision Strike and Defense Systems: $197.1M
- Space, Cyber and Directed Energy: $134.5M
- UxS: $120.2M
- Product sales: $28.6M

Domestic revenue was $373.6M and international revenue was $106.9M. The year-ago quarter was reported under a single contract-services line, so segment comparisons with last year are not available in our data.

## The trend over the last quarters.

| Quarter ended | Revenue | Gross margin | Operating margin | Free cash flow |
|---|---|---|---|---|
| Aug. 2, 2025 | $454.7M | 20.9% | -15.2% | -$146.5M |
| Nov. 1, 2025 | $472.5M | 22.0% | -6.4% | -$55.9M |
| Jan. 31, 2026 | $408.0M | 24.2% | -6.8% | -$17.7M |
| Apr. 30, 2026 | $641.6M | 31.6% | 8.9% | $79.1M |
| Aug. 1, 2026 | $480.5M | 25.9% | -2.3% | -$30.5M |

Gross margin, the share of revenue left after direct costs, was above the 20.9% of the quarter ended Aug. 2, 2025 in each of the last four quarters, and the latest quarter was higher than the year-ago quarter. Operating margin turned positive only in the quarter ended Apr. 30, 2026, then went back to a loss in the latest quarter. Free cash flow, the cash left after capital spending, was negative in four of the five quarters. In the latest quarter, operating cash flow was $13.5M while capital expenditure was $44.0M. The company paid no dividends and made no buybacks in any of these quarters.

The release and FMP data do not explain these margin swings, and we do not offer our own reason for them.

## Why it matters for investors

**Valuation against peers.** On trailing 12-month figures, AeroVironment has a price/sales ratio of 3.13 and a net margin of -14.5%. Its P/E is -21.22, which is negative because earnings over that period were a loss, so it is not useful for comparison. Among the peers in our data:

- Kratos Defense & Security Solutions (KTOS) has a market cap of $6.89B, a P/E of 303.97 and a net margin of 1.3%.
- AIRO Group Holdings (AIRO) has a P/E of -6.71 and a net margin of -23.9%.
- EHang Holdings (EH) has a P/E of -2.79 and a net margin of -106.7%.
- ParaZero Technologies (PRZO) has a P/E of -1.87 and a net margin of -391.2%.

Kratos is the closest in size, and it is barely profitable. Several smaller peers are loss-making.

**What analysts say.** FMP lists 30 ratings: 18 buy and 12 hold, with no sell ratings, for a consensus of Buy. The consensus price target is an average of 213.60 USD, a median of 210.00 USD, a high of 285.00 USD and a low of 165.00 USD. All of these are above the 123.5 USD latest quote. Analysts expect earnings per share of 1.03 USD for the period ending Aug. 1, 2028, and 0.98 USD for the period ending Nov. 1, 2028. These are estimates, not results. Recent rating actions were Keybanc maintaining Overweight on Nov. 2, 2026 and Citizens maintaining Market Outperform on Oct. 19, 2026.

**Our MoonshotScore.** Stock Expert AI's MoonshotScore V2 for AeroVironment is 35.2, which we label Weak. The pillars, measured against the sector, are:

- Safety: 65, the strongest
- Valuation: 35
- Growth: 32
- Quality: 31
- Momentum: 23, the weakest

In plain terms, the balance sheet looks sturdier than the earnings record or the share-price trend.

## What could go wrong.

- The company is not yet consistently profitable, and free cash flow was negative in the latest quarter.
- FMP reports net debt of $572.4M. Separately, the balance sheet as of Aug. 1, 2026 shows cash and short-term investments of $580.2M, total debt of $850.8M and shareholders' equity of $4.40B.
- The Piotroski score, a 0-9 gauge of financial health, is 3, which is on the low side. The Altman Z score, a bankruptcy-risk gauge, is 3.33.
- FMP's discounted cash flow model gives a value of -180.52 USD per share. This is a model output, not a forecast from us.
- Among the 30 most recent insider filings, those from the last 90 days show 0 open-market purchases and 4 sales. Our data may be missing older filings.
- A contract ceiling is not revenue. Orders may arrive more slowly than the ceiling implies.

## What to watch next

- **Dec. 8, 2026 earnings:** whether revenue reaches the $510.6M analyst estimate and whether the company's results reflect the new contract.
- **Order timing:** whether further orders follow the initial award, and how the company describes their timing.
- **Margins and cash:** whether gross margin holds near recent levels and whether free cash flow turns positive again after the latest quarter's negative result.
- **Capital spending:** the latest quarter's capital expenditure was higher than in the prior four quarters, so watch whether it stays elevated.

## Frequently asked questions

## Q: What is the new AeroVironment (AVAV) contract announced on Nov. 9, 2026?

According to its release, AeroVironment announced a multiyear IDIQ contract with a U.S. customer that includes an initial award for product deliveries and support. The release said the work will run through the AxS segment. The ceiling is the most the customer may order, not a commitment to buy it all.

## Q: Is AeroVironment profitable after its quarter ended Aug. 1, 2026?

Not on a net basis. It reported a net loss of $5.1M and diluted EPS of -0.1 USD, compared with a net loss of $67.4M and EPS of -1.44 USD a year earlier. Revenue of $480.5M and reported EPS of 0.59 USD beat analyst estimates, but operating income was still -$10.9M. The 0.59 USD EPS figure differs from the GAAP diluted EPS of -0.1 USD.

## Q: What do analysts expect for AeroVironment stock?

FMP shows a consensus rating of Buy, from 18 buy and 12 hold ratings. The consensus price target averages 213.60 USD, within a range of 165.00 USD to 285.00 USD, while the latest quote on Nov. 10, 2026 was 123.5 USD. Targets are analysts' views and can change.

## What our data could not verify

We could not verify the exact timing of orders under the new contract, the reasons for the margin changes, or the cause of the share-price move on Nov. 10, 2026. An outlet's Nov. 9 headline reported a share-price jump tied to the award, but that does not explain the next day's move. The release's dollar amounts are described in words because they are not in our verified dataset.

**Sources:** Our data: FMP financial and analyst data as of Nov. 10, 2026, and Stock Expert AI's MoonshotScore V2. Third-party: the company's Nov. 9, 2026 release and market news headlines.


*This is educational content, not investment advice. Past performance does not guarantee future results.*

## Related Tickers
- [AVAV](https://www.stockexpertai.com/stock/avav)

## Sources
- [Stock Expert AI AVAV page: quote, financials and MoonshotScore](https://www.stockexpertai.com/stock/avav)
- [businesswire.com: AV Secures Approximately $315 Million Award Under $940 Million IDIQ Contract](https://www.businesswire.com/news/home/20261109634954/en/AV-Secures-Approximately-315-Million-Award-Under-940-Million-IDIQ-Contract/)
- [zacks.com: AeroVironment (AVAV) Suffers a Larger Drop Than the General Market: Key Insights](https://www.zacks.com/stock/news/3027609/aerovironment-avav-suffers-a-larger-drop-than-the-general-market-key-insights?cid=CS-STOCKNEWSAPI-FT-fundamental_analysis|yseop_template_6v3-3027609)
- [247wallst.com: Ondas Retreats 9% Despite Attack Drone Purchase Order Ahead of Earnings; Red Cat Declines 9%, AeroVironment Falls 4%](https://247wallst.com/investing/2026/11/10/ondas-retreats-9-despite-attack-drone-purchase-order-ahead-of-earnings-red-cat-declines-9-aerovironment-falls-4/)
- [zacks.com: Will AeroVironment (AVAV) Beat Estimates Again in Its Next Earnings Report?](https://www.zacks.com/stock/news/3026653/will-aerovironment-avav-beat-estimates-again-in-its-next-earnings-report?cid=CS-STOCKNEWSAPI-FT-fundamental_analysis|yseop_template_7-3026653)
- [247wallst.com: Ondas Rallies 13% Ahead of Earnings, AeroVironment Jumps 10% on $315 Million Award; Red Cat Surges 10%](https://247wallst.com/investing/2026/11/09/ondas-rallies-13-ahead-of-earnings-aerovironment-jumps-10-on-315-million-award-red-cat-surges-10/)

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_Written by Stock Expert AI's research desk with AI assistance. Figures come from FMP data and the official sources cited in the article. Educational research, not financial advice._