Core Thesis - AeroVironment, Inc. (AVAV) is viewed as a high-beta, speculative growth company in the defense and unmanned systems market, with a market capitalization of approximately $11–12 billion and a backlog of around $1.1 billion [2] Financial Performance - FY25 revenue is estimated at $821 million, with Q1 FY26 revenue projected at $455 million, reflecting a remarkable 140% year-over-year increase [2] - FY26 guidance targets revenue between $1.9–2.0 billion, with EBITDA projected between $300–320 million [2] Market Position and Valuation - AVAV's business is driven by multiple segments, including small and medium unmanned aerial systems (UAS), loitering munitions, and directed energy solutions [2] - Valuation metrics are high, with EV/Sales around 11–12× and EV/EBITDA exceeding 100×, indicating market expectations for flawless execution and continued high growth [3] Customer Dependency and Risks - The company is highly dependent on the U.S. Department of Defense, which accounts for roughly 90% of its business, making execution and contract delivery critical for sustaining performance [3] - The concentrated customer base and high valuation introduce significant risk and volatility, positioning AVAV as a high-reward opportunity contingent on continued execution excellence [4] Growth Potential - The combination of explosive revenue growth, innovative product segments, and strategic acquisitions positions the company for substantial upside [4] - Analysts' price targets for AVAV range from $267 to $335, underscoring the premium placed on its potential [3] Comparative Analysis - AVAV's growth is compared with Anduril Industries, highlighting its rapid growth and speculative valuation [5] - The stock has appreciated approximately 68.9% since previous coverage, benefiting from growing UAV adoption [5]