Value
6.3/10data confidence 83%| Component | Sub-score |
|---|---|
| P/S | 8.2 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 4.4 |
| PEG | 10.0 |
| Analyst target | 9.0 |
- ▸Forward P/E: 28.0x
- ▸PEG: 0.14
AVAV · Why this verdict
Why AeroVironment (AVAV) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictSELL
Overall score4.7/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
AeroVironment is a defense contractor down 70% from its high with 52.1% upside to the analyst target and recent large earnings beats, but quality is weak (2.4/10), free cash flow is negative and nearly all revenue depends on the U.S. government.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The analyst target of $191.76 implies 52.1% upside from $126.11, with reward-to-risk of 4.69 against 11.1% downside. Upside pct | Price recovers toward the analyst target as earnings improve. | →Stable |
| CounterThe stock is 70% off its 52-week high in a confirmed downtrend, and analyst targets may lag deteriorating fundamentals. | ||
Customer concentration is extreme: the U.S. government accounts for 85.0% of the business and the DoD alone for 63.0%. Bear case | Defense budget funding remains stable and government share does not rise above 85%. | ↓Deteriorating |
| CounterA budget cut, contract delay or protest could hit most revenue at once with no commercial offset. | ||
Quality is weak at 2.4, below the 4.0 floor, with free cash flow at -1% of revenue and no competitive moat. Quality breakdown | Free cash flow turns positive and quality recovers above 4.0 within 12 months. | →Stable |
| CounterFree cash flow of only -1% of revenue is close to breakeven, so growth investment may be driving the low score. | ||
EPS beat estimates in 2 of the last 4 quarters and missed in 2, ranging from a 138% beat in September 2026 (0.59 versus 0.25) to a 44% miss in December 2025. Earnings track record | EPS meets or beats estimates at the 2026-12-02 report. | ↑Improving |
| CounterThe two latest quarters both beat, which may mark a turnaround, but two prior misses show unpredictability. | ||
Momentum is mixed at 5.4: price is below the 200-day average with a -10.4% per 30-day slope, but rising on-balance volume shows accumulation. Momentum breakdown | Price reclaims the 200-day average and the slope turns positive. | Tripped→Stable |
| CounterImplied volatility of 90% and short interest of 13% show high uncertainty, and a death cross is only recovering. | ||
The analyst target of $191.76 implies 52.1% upside from $126.11, with reward-to-risk of 4.69 against 11.1% downside.
→StableUpside pct
- Expectation
- Price recovers toward the analyst target as earnings improve.
CounterThe stock is 70% off its 52-week high in a confirmed downtrend, and analyst targets may lag deteriorating fundamentals.
Customer concentration is extreme: the U.S. government accounts for 85.0% of the business and the DoD alone for 63.0%.
↓DeterioratingBear case
- Expectation
- Defense budget funding remains stable and government share does not rise above 85%.
CounterA budget cut, contract delay or protest could hit most revenue at once with no commercial offset.
Quality is weak at 2.4, below the 4.0 floor, with free cash flow at -1% of revenue and no competitive moat.
→StableQuality breakdown
- Expectation
- Free cash flow turns positive and quality recovers above 4.0 within 12 months.
CounterFree cash flow of only -1% of revenue is close to breakeven, so growth investment may be driving the low score.
EPS beat estimates in 2 of the last 4 quarters and missed in 2, ranging from a 138% beat in September 2026 (0.59 versus 0.25) to a 44% miss in December 2025.
↑ImprovingEarnings track record
- Expectation
- EPS meets or beats estimates at the 2026-12-02 report.
CounterThe two latest quarters both beat, which may mark a turnaround, but two prior misses show unpredictability.
Momentum is mixed at 5.4: price is below the 200-day average with a -10.4% per 30-day slope, but rising on-balance volume shows accumulation.
Tripped→StableMomentum breakdown
- Expectation
- Price reclaims the 200-day average and the slope turns positive.
CounterImplied volatility of 90% and short interest of 13% show high uncertainty, and a death cross is only recovering.
Per-dimension breakdown
Quality
2.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 0.0 |
| Gross margin | 1.3 |
| Op margin | 0.0 |
| Net margin | 0.0 |
| Current ratio | 8.7 |
| FCF quality | 0.0 |
| Moat | 5.1 |
| Piotroski F | 6.7 |
- ▸Cash-burning: FCF -1% of revenue
- ▸No competitive moat
- ▸Quality concerns
Growth
3.9/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 3.9 |
Momentum
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.5 |
| MACD | 10.0 |
| OBV | 1.0 |
| MA position | 1.0 |
| Volume | 9.8 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope -11.4%/30d — confirmed downtrend
Sentiment
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 4.8 |
| Analyst rating | 7.5 |
| Price target | 9.9 |
- ▸Analyst upside: 87%
Insider
3.6/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 2.7 |
| notable moves | 3.0 |
- ▸Negligible insider selling — $142,671 (0.002% of mkt cap)
Peer rank
3.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.0 |
| quality rank | 1.7 |
| growth rank | 1.0 |
Technical
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 9.3 |
| support resistance | 8.6 |
| 52w position | 0.0 |
| gap | 6.0 |
Risk (lower is worse)
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 3.5 |
| days to cover | 7.5 |
| volatility | 0.0 |
| put call | 7.9 |
| implied vol | 0.2 |
| max pain risk | 3.0 |
| beta | 5.4 |
| debt equity | 9.2 |
| news risk | 5.5 |
- ▸High IV: 79%
- ▸Above max pain $90
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| news activity | 8.0 |
- ▸Earnings concerns: 2B/2M
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (6)
- MOMENTUM:5.1>=4.5
- ASYMMETRY:5.4>=1.5
- INSIDER:OK
- EARNINGS_PROXIMITY:28d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (3)
- MOMENTUM:5.1<5.5 (soft — BUY_NOW allowed but watch)
- DEATH_CROSS:momentum=5.1>=5.0 recovering
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
5.42
Upside
+68.7%
Downside
12.7%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilitySpeculative — Drawdown -73% (>40% off 52w high)
Investment implication
The SELL_IF_HOLDING verdict reflects clean gate clearance against Sentiment at 7.3 and asymmetric R:R of 5.42.
The strongest dimensions are Sentiment at 7.3, Value at 6.3, and Catalyst at 6.3; the weakest are Quality at 2.4, Insider at 3.6, and Peer rank at 3.7. The V9 engine cleared all gates with 3 warnings, producing an asymmetric reward-to-risk of 5.42 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Analyst Target Upside
Trip ifUpside to analyst target falls below 20% from the current 52.1%.
- P2Government Customer Concentration
Trip ifU.S. government share of business exceeds 90% from the current 85.0%.
- P3Weak Quality Cash Burn
Trip ifFree cash flow falls below -10% of revenue from the current -1%.
- P4Volatile Earnings Record
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.
- P5Confirmed Downtrend MomentumTripped
Trip ifPrice drops below the $117.28 stop level from the current $126.11.