AeroVironment: 30% Selloff Creates A Buy Opportunity For The Drone Specialist (Rating Upgrade)

Dhierin BechaiInvesting Group LeaderFollow5ShareSavePlay(8min)CommentsSummaryAeroVironment is upgraded from hold to buy after a 30% share price correction creates compelling upside potential.The operational deployment of the LOCUST counter-drone system validates AVAV's BlueHalo acquisition and strengthens its position in high-growth defense tech.Despite a mixed EPS track record, AVAV is expected to deliver strong revenue and free cash flow growth, especially post-BlueHalo integration.A $324.27 price target for 2028 implies 33% upside, with the net cash position reducing acquisition-related capital pressure.Looking for a helping hand in the market? Members of The Aerospace Forum get exclusive ideas and guidance to navigate any climate. Learn More » Olena Bartienieva/iStock via Getty Images AeroVironment (AVAV) has lost around 30% of its value since I downgraded the stock, noting a stretched valuation. The US Army recently deployed AeroVironment’s anti-drone weapon system near El Paso Airport. In this report, I discussThis article was written byDhierin Bechai22.96K FollowersFollowDhierin-Perkash Bechai is an aerospace, defense and airline analyst. Dhierin runs the investing group The Aerospace Forum, whose goal is to discover investment opportunities in the aerospace, defense and airline industry. With a background in aerospace engineering, he provides analysis of a complex industry with significant growth prospects, and offers context to developments as they occur, describing how they might affect investment theses. His investing ideas are driven by data informed analysis. The investing group also provides direct access to data analytics monitors. Learn more.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.