AeroVironment (AVAV) stock moved after the company highlighted fresh government backed expansion plans, including new facilities in Huntsville, Alabama and Greene County, Ohio, as well as recent contract wins in missiles and advanced materials.

At a share price of $204.09, the stock has had a strong 7 day share price return of 17.14% and a 1 year total shareholder return of 13.13%. However, the year to date share price return is down 20.34%. This suggests that recent momentum has picked up again as investors weigh contract wins and facility expansions against earlier concerns around legal and program risks.

If the recent move in AeroVironment has you looking across defense and automation, this could be a good moment to scan 33 robotics and automation stocks for other potential ideas.

With AeroVironment trading at $204.09, carrying a low value score of 1, sitting on a recent loss of $224.36 million, but at a reported 51.83% discount to analyst targets, is there still a buying opportunity here, or is the market already pricing in future growth?

Most Popular Narrative: 27.1% Undervalued

Against Monday’s close of $204.09, the most followed valuation narrative for AeroVironment points to a fair value of $280.00, implying a meaningful gap that the market has not closed.

The bull case for AVAV isn't just about drones. It’s about ubiquity. In 20th-century warfare, air superiority required multi-million dollar jets and years of pilot training. In 2026, air superiority is increasingly defined by "low cost" systems, cheap, smart, and expendable.

According to C_Coffeen, this fair value leans heavily on expectations for fast scaling of autonomous systems, improved profit margins, and a valuation multiple more in line with high growth tech peers. The key question is how those assumptions around growth, profitability, and future earnings power stack up against your own view of the business.

Result: Fair Value of $280.00 (UNDERVALUED)

However, this narrative still hinges on successful integration of BlueHalo and sustained demand for uncrewed and directed energy systems, with AeroVironment currently reporting a loss of $224.36 million.

Another View: Cash Flows Tell A Different Story

While the user narrative sees AeroVironment as 27.1% undervalued at a fair value of $280.00, the SWS DCF model points in the opposite direction. At $204.09, the stock sits above an estimated future cash flow value of $143.49, which frames it as expensive on this measure and raises the question of which set of assumptions you trust more.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out AeroVironment for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 48 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

If this mix of optimism and caution feels familiar, take a moment to review the data points yourself, pressure test the key assumptions, and then weigh AeroVironment’s potential upside against its risks with the help of 1 key reward.

Looking for more investment ideas?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.