TLDR

  • AVAV climbed 1.1% following a CBS 60 Minutes feature showcasing its LOCUST laser drone defense system
  • LOCUST operates at a few dollars per engagement compared to $4 million missile costs for neutralizing $20,000–$40,000 drones
  • Funded backlog expanded 47% year-over-year in Q3’26, achieving a book-to-bill ratio of 1.07x
  • The company recorded a $151 million goodwill impairment following termination of its Space Force SCAR contract
  • Wall Street analyst maintains Strong Buy rating with $363 price target, driven by expanding global drone market demand

AeroVironment’s LOCUST laser defense platform received prime-time television exposure Sunday evening, catching Wall Street’s attention.

AVAV advanced 1.1% to $209.29 during early Monday session hours after CEO Wahid Nawabi showcased the company’s directed energy capabilities on CBS’s 60 Minutes. The S&P 500 gained 0.6% while the Dow added 0.4% during the same timeframe.


AVAV Stock Card
AeroVironment, Inc., AVAV

The broadcast highlighted a critical asymmetric warfare challenge: Iran’s Shahed drones carry price tags of $20,000–$40,000 per unit. Traditional missile interceptors cost $4 million each. This economic imbalance has accelerated Pentagon interest in affordable alternatives.

LOCUST — Laser Optical Counter-Unmanned Aerial System for Tactical Use — represents one such alternative. The platform leverages artificial intelligence to acquire and maintain target locks, penetrating drone airframes within seconds. Each engagement costs mere dollars.

Deployment has already occurred along America’s southern border, where the technology neutralizes drug trafficking organization drones.

Backlog and Production Expansion

Beyond Sunday evening’s television exposure, AVAV benefits from substantial fundamental momentum. The company exited Q3’26 with funded backlog growth of 47% year-over-year, producing a book-to-bill ratio of 1.07x.

During Q3’26, the U.S. Army committed $186 million for Switchblade 600 Block 2 and Switchblade 300 platforms. This order forms part of a broader 5-year, $990 million contract secured in 2024.

AVAV is currently expanding its Salt Lake City production infrastructure to accommodate $2 billion in incremental annual revenue capacity. The company targets 4x growth in Titan C-UAS production during 2026, scaling to 10x by 2030.

December 2025 brought another Army award: a separate 5-year, $874 million IDIQ contract supporting foreign military sales of drone and counter-drone technologies.

AVAV maintains ongoing discussions with Asian defense partners including Taiwan, Japan, and South Korea regarding autonomous defense platforms.

Space Force Setback

The operational landscape includes challenges. AVAV recently terminated its U.S. Space Force contract for the BADGER phased array antenna platform after firm-fixed-price structure negotiations reached an impasse.

The company absorbed a $151 million goodwill impairment charge in Q3’26 connected to its space operations. Management indicated revenue exposure below $100 million, though up to $1.5 billion in unfunded backlog faces potential impact.

AVAV retains the option to participate in future competitive bidding under revised terms.

Entering Monday’s session, shares had declined 14% year to date — primarily reflecting the contract termination announcement — while maintaining 60% gains over the trailing 12 months.

One Wall Street analyst maintains a Strong Buy rating on AVAV with a $363 price objective, based on 53.18x FY27 EV/aEBITDA. Current trading multiples of 50.29x sit below historical midpoint valuations.