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

Asymmetric 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

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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

Predictions (1)

Bear

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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