AeroVironment secures $117.3 million U.S. Army contract for P550 eVTOL system
The U.S. Army has awarded AeroVironment a $117.3 million deal for its unmanned aerial system, bolstering the company’s backlog amid recent financial growth and mixed analyst sentiment.
AeroVironment has been awarded a $117.3 million contract by the U.S. Army for its P550 electric vertical take-off and landing (eVTOL) unmanned aerial system. The agreement is designed to support the Army’s Long Range Reconnaissance program, marking a significant step in the deployment of the firm’s autonomous technologies for modern warfare applications.
The announcement, made on July 20, coincided with a marginal intraday improvement in AeroVironment’s stock price. The Virginia-based defence technology company, which has a market capitalisation of $7.53 billion, continues to expand its portfolio of robotic systems, including uncrewed aircraft and loitering munitions, for government and commercial customers.
This contract comes as the company seeks to stabilise its market position after a period of significant volatility. AeroVironment’s shares have dropped 40% over the past 52 weeks and 35% year-to-date, largely following the loss of a key Space Force contract. Despite this downward pressure, the stock has recovered 15.9% from its 52-week low of $135.20 recorded on June 25.
Financially, the firm reported strong results for the fourth quarter of fiscal 2026, which ended on April 30. Revenue surged 133.3% year-on-year to $641.62 million, driven by a 106% increase in product sales and contributions from the acquisitions of BlueHalo and Empirical Systems Aerospace. Funded backlog also rose sharply to $1.20 billion from $726.60 million a year earlier.
Wall Street analysts remain divided on the near-term outlook. Raymond James upgraded the stock to “Outperform” with a $210 price target, citing potential momentum from the Army’s E-HEL program. Conversely, Canaccord Genuity and Piper Sandler maintained their positive ratings but lowered their price targets to $240 and $235 respectively, reflecting adjusted expectations for the sector.
