TLDR
- AVAV gained 1.1% following a CBS 60 Minutes segment highlighting its LOCUST laser-based counter-drone technology
- Each LOCUST shot costs only a few dollars compared to $4 million missiles needed to neutralize $20,000–$40,000 drones
- Q3’26 funded backlog expanded 47% compared to the prior year, achieving a 1.07x book-to-bill ratio
- The company recorded a $151 million goodwill impairment following the termination of its Space Force SCAR program
- An analyst maintains a Strong Buy recommendation with a $363 target price, highlighting increasing worldwide drone requirements
National television exposure gave AeroVironment’s advanced laser technology a visibility boost that caught investors’ attention.
Shares of AVAV climbed 1.1% to $209.29 during Monday’s opening session following CEO Wahid Nawabi’s appearance on CBS’s 60 Minutes, where he detailed the company’s directed energy capabilities. For context, the S&P 500 advanced 0.6% while the Dow Jones gained 0.4% during the same period.
The broadcast highlighted a significant cost disparity: Iranian-made Shahed drones carry a price tag of $20,000–$40,000, yet destroying them requires $4 million missiles. This economic imbalance has driven the Department of Defense to seek more affordable alternatives.
LOCUST — an acronym for Laser Optical Counter-Unmanned Aerial System for Tactical Use — represents such an alternative. The system employs artificial intelligence for target acquisition and tracking, then uses laser energy to disable drone airframes within seconds. Each engagement costs merely a few dollars.
The technology has already seen operational deployment at the U.S. southern border, where it neutralizes unmanned aircraft operated by drug trafficking organizations.
Order Book Growth and Facility Expansion
Beyond the television exposure, AVAV’s business fundamentals show substantial momentum. The company reported Q3’26 results with funded backlog increasing 47% compared to the same quarter last year, producing a book-to-bill ratio of 1.07x.
During Q3’26, the U.S. Army issued a $186 million purchase order for Switchblade 600 Block 2 and Switchblade 300 platforms. This order falls under a broader 5-year contract worth $990 million that was secured in 2024.
AVAV is currently upgrading its Salt Lake City production complex to accommodate an additional $2 billion in yearly revenue capacity. The company also aims to quadruple Titan C-UAS production in 2026 and increase it tenfold by 2030.
In December 2025, the Army granted AVAV another 5-year IDIQ contract valued at $874 million to facilitate international sales of its unmanned systems and counter-UAS technologies.
AVAV is currently engaged in discussions with Pacific region partners including Taiwan, Japan, and South Korea regarding autonomous defense platforms.
Military Space Program Termination
However, not all developments have been favorable. AVAV recently ended its agreement with the U.S. Space Force for the BADGER phased array antenna program after failing to reach consensus on firm-fixed-price contract terms.
The termination triggered a $151 million goodwill impairment in Q3’26 related to its aerospace division. Company leadership indicated the revenue effect would remain under $100 million, though potentially $1.5 billion in unfunded backlog could be impacted.
AVAV retains the opportunity to submit a new proposal for the program under revised conditions.
Prior to Monday’s session, shares were down 14% year to date — primarily reflecting the contract termination announcement — though the stock maintained a 60% gain over the trailing twelve months.
One Wall Street analyst has assigned a Strong Buy rating with a $363 price objective, calculated using 53.18x FY27 EV/aEBITDA. Current trading multiples sit at 50.29x, below the stock’s historical median valuation.
