AeroVironment (AVAV) is back in focus after issuing fiscal 2027 guidance and reporting detailed results for the quarter and year ended April 30, 2026, clarifying how recent growth translates into earnings.

AeroVironment’s recent Q4 earnings beat and fiscal 2027 guidance have come alongside sharp share price swings. A strong 7 day share price return of 21.28% contrasts with a year to date share price decline of 32.69% and a 1 year total shareholder return that is down 29.97%. However, the 3 year total shareholder return of 75.21% shows that longer term holders have still seen substantial gains.

If AeroVironment’s recent moves have you rethinking your defense and robotics exposure, it could be a good moment to look across the sector and scan 29 robotics and automation stocks

With AeroVironment now valued at about $8.3b and trading at $172.44 against an average analyst price target of roughly $247, the key question is whether recent contract wins and guidance leave the stock undervalued or already fully pricing in future growth.

Most Popular Narrative: 38.4% Undervalued

Against AeroVironment’s last close at $172.44, the most followed narrative points to a fair value of $280, framing the recent guidance in a very different light.

AeroVironment owns the "gold standard" in this category. With the recent integration of BlueHalo, the company has transformed into a comprehensive "all-domain" provider, adding space, cyber, and directed energy (lasers) to its portfolio. Investors are essentially betting that AVAV will be to the 21st-century military what Boeing or Lockheed Martin was to the 20th.

Curious what justifies that higher fair value for AeroVironment? The narrative leans heavily on faster earnings growth, rising margins, and a future earnings multiple more often associated with high growth tech stocks, not traditional contractors.

Result: Fair Value of $280 (UNDERVALUED)

However, AeroVironment’s narrative could be challenged if defense budgets shift away from uncrewed systems, or if integration of BlueHalo fails to deliver expected cost efficiencies.

Another View: SWS DCF Model Points To Overvaluation

The user narrative for AeroVironment leans on a fair value of $280, but the SWS DCF model points in the opposite direction. Based on estimated future cash flows, AeroVironment at $172.44 is trading well above an indicated value of $89.48, which implies an overvalued stock on this framework. So which story do you lean on when growth expectations are this different?

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 41 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

With such different signals around AeroVironment, are you leaning optimistic or cautious, and how quickly do you want to firm up your stance? Take a closer look at both sides of the story, including the company's potential upsides and the issues investors are watching closely, by reviewing the 1 key reward and 1 important warning sign

Looking for more investment ideas beyond AeroVironment?

If AeroVironment has sharpened your interest in defense and growth themes, do not stop here. Let the Simply Wall St Screener surface a wider set of opportunities.

• Spot potential mispricings early by scanning screener containing 19 high quality undiscovered gems that combine solid fundamentals with lower visibility among broader investors.
• Strengthen your income stream by reviewing 8 dividend fortresses that focus on higher yields with a focus on stability.
• Dial down portfolio stress by considering 73 resilient stocks with low risk scores built around companies with more resilient risk profiles.

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.