The US-Israel war on Iran has now entered its second week, with strikes and counterstrikes showing little sign of slowing and rhetoric heating up after high-profile demands for Iran’s “unconditional surrender.” Donald Trump’s hardline comments and Tehran’s retaliatory responses have raised fears of wider regional disruption, notably around the crucial shipping lane at the Strait of Hormuz, which markets watch closely for commodity and supply-chain shocks.
That brief backdrop helps explain why drone and counter-UAV companies are in focus this earnings season. One company to watch is AeroVironment (AVAV), which is the maker of small unmanned systems that will report third-quarter results after the close on March 10, 2026, a date traders should mark.
A few days before earnings, AV scored a U.S. Army award to develop the GENESIS sensor-testing environment, and its BlueHalo acquisition has materially beefed up backlog and revenue scale, factors that could help management meet lofty Street expectations.
For investors who follow defense tech, the March 10 release and conference call could clarify whether AVAV’s contract wins and integration progress justify the premium investors have priced in.
About AeroVironment Stock
AeroVironment is a defense-technology firm specializing in unmanned and autonomous systems. It delivers integrated capabilities across air, land, sea, space, and cyber domains, developing everything from surveillance drones and loitering munitions to counter-drone and directed-energy weapons. In short, AVAV stands out for packing advanced autonomy and precision targeting into lightweight defense platforms, aiming to give warfighters an edge.
In 2026, AeroVironment's stock has traded mostly sideways. Shares climbed into the mid-$200s during a defense-sector rally earlier this year but pulled back by early March. Similarly, it happens on March 2, when AVAV briefly surged to about $284 before plunging to roughly $196 by the end of the same session. Year to date, the shares are down about 5%, though they remain up roughly 70% over the past year. Gains, driven by rising demand for drones and new contract wins, have recently been tempered by profit-taking and uncertainty around key government contracts.
AVAV's valuation appears stretched, with metrics like EV/Sales at 8.18, significantly higher than the sector median of 2.35, indicating an overvalued stock compared to its peers. Additionally, the P/E ratio of 82.61 far exceeds the sector median of 22.48, further suggesting overvaluation.
Upcoming Earnings Preview
Wall Street expects solid growth in Q3. Consensus is for about $473 million in revenue, up 182% year-over-year, and $0.68 in EPS, up 126%. These lofty forecasts show the boost from last year’s BlueHalo acquisition and robust defense spending.
Management has already guided higher for fiscal 2026, bumping full-year sales to roughly $1.95 to $ 2.0 billion, based on record bookings. Options markets imply a large expected swing on the order of 10% around earnings, so traders should brace for volatility.
If we look back, AVAV has a recent track record of beating revenue forecasts. In Q4 2025, it posted $275.1 million in revenue, which was up 40% YoY and $1.61 EPS, topping Street estimates by 15%. The momentum carried into Q2 2026, as well as revenue, was about $472.5 million, increasing around 151% YoY, narrowly above guidance, despite a brief delay due to a government shutdown. However, heavy spending has kept profits depressed, for example, AVAV swung back to a net loss in FY2025 after prior profits.
On March 10, analysts will focus on several things. whether AVAV can repeat the upside surprises, how its gross margin is holding up, and management’s commentary on backlog and cost pressures. Guidance on the SCAR program and other big contracts will be key. All told, the upcoming report should clarify how much recent contract wins and the backlog flow into the financials.
Recent Contract Wins and Expansion Plans
Investors are coming into the earnings with fresh headlines in hand. Just a few days ago, AVAV announced a $97.4 million U.S. Army contract to develop its next-gen GENESIS sensor-testing environment for missile defense. It also revealed a $30 million investment to expand its Albuquerque factory for space and directed-energy hardware. These developments add to the company’s backlog and production capacity.
On the flip side, AVAV publicly confirmed it is renegotiating a Space Force SCAR communications contract. That uncertainty has been a drag on sentiment. The big takeaway: all these factor, new wins and renegotiations, will flow into the March results. Investors will be watching whether strong orders offset any contract delays and how backlog turns into revenue.
What Analysts Say About AVAV Stock?
Wall Street is looking optimistic on AVAV Stock . As per Barchart data, 20 analysts rate AVAV a consensus “Moderate Buy” . The average 12-month price target is about $348, implying roughly 50% upside from today’s levels.
Separately, multiple firms have been seen updating their price target lately. Goldman Sachs reiterated a Buy with a $429 target. Similarly, big names Jefferies, Piper Sandler, and Cantor Fitzgerald all carry Overweight ratings, with targets of $390, $391, and $315, respectively. Jefferies cited one-time shutdown impacts for its cut.
Needham is most bullish at $450 with a Buy rating . Overall, Analysts generally believe AVAV’s strong backlog and defense demand justify lofty targets. They’ll be listening closely to management’s comments on bookings, margins, and growth drivers; any guidance update or hiccup could quickly swing the stock.
Overall, consensus is positive, but the story hinges on execution; a miss on March 10 could lead to a swift market reaction, while a beat could reinforce the uptrend.
On the date of publication, Nauman Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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