While Palantir (PLTR) continues to trade at premium valuations, savvy investors should consider AeroVironment (AVAV), a defense technology powerhouse trading at significantly lower earnings multiples despite comparable growth prospects. AeroVironment develops defense technology and cyber operations at a much more attractive valuation than Palantir, making AVAV stock more attractive for value-conscious investors.
Citizens Bank recently initiated coverage on AVAV stock with an “Outperform” rating and a price target of $325, recognizing the company’s leadership position across multiple defense domains.
The $4.1 billion BlueHalo acquisition has transformed AeroVironment into a diversified defense technology leader spanning air, land, sea, space, and cyber domains. This strategic acquisition reduces concentration risk as no single mission area is expected to contribute more than 30% of fiscal 2026 revenue.
With over 50 years of proven battlefield experience and nearly $2 billion invested in research and development over the past decade, AeroVironment delivers software-defined hardware solutions, including Switchblade loitering munitions, unmanned aircraft systems, and cybersecurity platforms.
The expansion of the U.S defense budget, which includes $25 billion for missile-defense systems and $13.4 billion for autonomous platforms, directly benefits AeroVironment’s core competencies. AVAV stock is well-positioned to capitalize on the U.S. government’s shift toward next-generation defense technologies.
In Q4 of its fiscal 2025 (ended in April), AeroVironment reported revenue of $275 million, an increase of 40% year over year. The company ended fiscal 2025 with revenue of $821 million, indicating organic growth of 14% despite lower Ukraine-related sales.
AeroVironment secured $1.2 billion in total bookings and reported a backlog of $726 million, up 82% year over year. Notably, its Loitering Munition Systems segment generated $352 million in annual revenue, an 83% increase, driven by strong Switchblade demand from both domestic and international customers.
