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Behind the video

Is AVAV a Buy? My Honest Take on the Recent Earnings

The thesis, the calls, and the words behind them. Play a quote to hear it in the original video.
Asymmetric Investing by Travis HoiumAsymmetric Investing by Travis HoiumSep 10, 2026Watch on YouTube
Overall SentimentBearishStrength: 75%

Overall Thesis

AeroVironment (AVAV) is not a buy despite positive earnings and backlog growth due to slowing revenue growth (6% YoY), weak margins (25% gross margin), business lumpiness, and expensive valuation (50x forward earnings).

Narratives

AVAVAeroVironment
Bearish

Travis Hoium argues that AeroVironment's revenue growth has slowed to just 6% year-over-year while the stock trades at nearly 50x forward non-GAAP earnings, making it expensive relative to its actual growth. He is also concerned about inconsistent GAAP profitability and lumpy revenue, and states he is not buying the stock after this earnings report.

Key Arguments

  • Revenue growth slowed to 6% year-over-year, down from much higher growth a year ago
  • Stock trades near 50x forward non-GAAP earnings estimates, which he calls very expensive for the growth rate shown
  • GAAP gross margin is just over 25% and the company has had inconsistent GAAP profitability, including a $270 million operating loss in the January 2026 quarter and a $10.9 million operating loss this quarter
  • Business is lumpy, with segment growth uneven (UAS up strongly, precision strike up only ~8%, space/directed energy and cyber declined)
  • Tailwinds from Ukraine and Iran conflicts may have been temporary rather than durable growth drivers

Risks acknowledged

  • Backlog grew 37% year-over-year, with funded backlog up to $1.5 billion and unfunded up to $1.4 billion
  • Company is winning notable contract awards
  • Drones are viewed as a long-term growth industry and AeroVironment has been a strong performer over the past decade

Predictions (1)

Bear
Not scoredDetails

Hedges & Caveats

  • Backlog growth of 37% YoY shows operational strength
  • Company continues to grow despite stock decline
  • Future tailwinds from geopolitical conflicts (Ukraine, Iran) may be temporary
  • Non-GAAP metrics used for profitability analysis
  • Guidance provided for fiscal 2027 shows 10% growth at midpoint
Analyzed with claude-sonnet-5 | Extraction v1.0.0 | Cost: $0.05