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Verdict
Quantitative factor alignment verified for current market regime.
Quant Score
Rank
#2896
Positioning
Market Dominance
Manufacturing
Aircraft
$18.5B
Wahid Nawabi
AeroVironment, Inc. supplies UAS, tactical missile systems, and related services primarily to organizations within the U.S. Department of Defense and to international allied governments. It also designs, engineers, tools, and manufactures unmanned aerial and aircraft systems.
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| Stock | Rating | Score▼ | Quality | Value | Momentum | P/E | EV/EBITDA | ROE | ROA | Gross Mgn | Op Mgn | Net Mgn | Rev Growth | Div Yield | D/E | Mkt Cap | AUDIT |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
$UL UNILEVER PLC | 78 | 96 | 98 | 59 | - | - | 28.5% | 8.0% | 100.0% | 100.0% | 10.4% | -4.6% | 3.3% | 0.0x | $141.8B | VS | |
$ASML ASML HOLDING NV | 77 | 89 | 86 | 83 | - | - | 46.1% | 16.6% | 51.3% | 31.9% | 26.8% | -4.0% | 1.0% | 25.0x | $272.1B | VS | |
$ESLT ELBIT SYSTEMS LTD | 76 | 81 | 87 | 85 | - | - | 10.3% | 3.1% | 24.1% | 7.2% | 4.7% | 14.3% | 0.8% | 25.0x | $11.4B | VS | |
$MT ArcelorMittal | 75 | 71 | 98 | 85 | - | - | 2.2% | 1.5% | 9.3% | 5.3% | 2.2% | -8.5% | 2.2% | 16.0x | $18.9B | VS | |
$AMAT APPLIED MATERIALS INC /DE | 75 | 85 | 87 | 84 | 20.9x | 13.6x | 35.5% | 19.8% | 48.7% | 29.2% | 24.7% | 4.4% | 0.8% | 32.0x | $181.9B | VS | |
$SIMO Silicon Motion Technology CORP | 75 | 84 | 86 | 85 | - | - | 11.8% | 8.8% | 45.9% | 11.3% | 11.1% | 25.7% | 3.7% | 0.0x | $1.8B | VS | |
$CODA Coda Octopus Group, Inc. | 74 | 83 | 90 | 79 | 16.3x | 11.9x | 7.6% | 7.0% | 66.5% | 17.1% | 15.6% | 39.0% | 0.0% | 0.0x | $115M | VS | |
$GSK GSK plc | 74 | 84 | 90 | 70 | - | - | 22.6% | 4.9% | 71.2% | 12.8% | 9.4% | 1.7% | 5.9% | 124.0x | $72.1B | VS | |
$EFXT Enerflex Ltd. | 74 | 80 | 91 | 83 | - | - | 3.0% | 1.1% | 20.9% | 7.3% | 1.3% | 3.0% | 0.9% | 67.0x | $1.2B | VS | |
$BUD Anheuser-Busch InBev SA/NV | 74 | 84 | 97 | 63 | - | - | 8.2% | 3.5% | 55.3% | 25.9% | 12.4% | 0.7% | 1.7% | 0.0x | $87.0B | VS | |
$AVAV AeroVironment Inc | 44 | 40 | 44 | 63 | - | 136.5x | -0.9% | -0.7% | 35.2% | -0.3% | -0.2% | 143.7% | 0.0% | 17.0x | $18.5B | ||
| SECTOR BENCH | - | - | - | - | - | 22.3x | 11.5x | -2.5% | -0.1% | 42.5% | 1.3% | -0.2% | 5.9% | 0.0% | 0.2x | - | REF |
AeroVironment Inc (AVAV) receives a "Reduce" rating with a composite score of 44.4/100. It ranks #2896 out of 7,333 stocks in our coverage universe and carries a 2-star rating. Ratings are driven by a 6-factor quantitative model measuring quality, value, momentum, investment, stability, and short interest.
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YOY expansion rate
Core pricing power
Operating efficiency
Bottom-line conversion
Equity capital efficiency
Asset base utilization
Financial leverage load
Direct cash return
Wahid Nawabi
Chief Executive Officer
Labor Force
1,210
40
17
49
Audit Verdict: Lower quality and stability scores may indicate governance concerns.
No recent insider transactions available for AVAV
Outperforming peers — winners tend to keep winning over 3-12 months
Fair valuation relative to peers
Average quality profile
Average volatility — neutral timing signal
Aggressive spending — empire-building risk, dilutive growth
Mid-range overall rating
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Relative valuation derived from Manufacturing sector benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Re-calculated daily.
No analyst ratings for AVAV.
View All RatingsMaterial decline in asset turnover efficiency detected
High margin volatility — erratic forensic earnings quality
| Factor | Global | Sector | Tilt |
|---|---|---|---|
| PROFITABILITY | 40 | 17 | +23ALPHA |
| MOMENTUM | 63 | 60 | +3NEUTRAL |
| VALUATION | 44 | 22 | +22ALPHA |
| INVESTMENT | 17 | 1 | +16ALPHA |
| STABILITY | 49 | 31 | +18ALPHA |
| SHORT INT | 77 | 88 | -11DRAG |
Global = full universe. Sector = relative to industry peers. Positive tilt indicates idiosyncratic strength.
ROIC -14.1% vs WACC 9.4% (spread -23.5%)
GM 35% vs sector 43%, OM -0% vs sector 1%
Capital turnover 1.17x, R&D intensity 7.3%
Rev growth 144%, 11yr history
Interest coverage N/A
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation and elite competitive moats.
Profit generated per dollar of shareholder equity
Efficiency of asset utilization
Pricing power and cost efficiency
Core business profitability
Bottom-line profitability
The Quality factor evaluates the persistence and magnitude of realized cash flows. Companies with scores >70 exhibit superior pricing power and structural financial resilience through diverse economic regimes.
Our uncertainty rating tracks the predictability of future cash flows and potential for permanent capital loss. Moderate visibility with standard industry cyclicality.
AeroVironment Inc receives a Reduce rating from our analysis, with a composite score of 44.4/100 and 2 out of 5 stars, ranking #2896 out of 7,333 stocks. AVAV's factor profile shows weakness across multiple dimensions, suggesting the stock may underperform going forward. Existing holders may want to consider trimming positions or tightening stop-losses.
AVAV's quality score of 40/100 is below average, suggesting challenges with profitability or capital efficiency. The company reports a return on equity of -0.9% (sector avg: -2.5%), gross margins of 35.2% (sector avg: 42.5%), net margins of -0.2% (sector avg: -0.2%). Investors should examine whether management is actively addressing these weaknesses or if they reflect structural industry headwinds.
With a value score of 44/100, AVAV appears somewhat expensive relative to its fundamentals. Key valuation metrics include an EV/EBITDA of 136.52x, a P/B ratio of 2.98x. Investors paying a premium here are likely betting on above-average growth or margin expansion to justify current prices.
AeroVironment Inc's investment score of 17/100 suggests limited reinvestment activity. Key growth metrics include revenue growth of 143.7% vs. a sector average of 5.9% and a return on assets of -0.7% (sector: -0.1%). While this can be positive for mature, cash-generative businesses returning capital to shareholders, it may also signal a lack of growth opportunities or management conservatism.
AVAV demonstrates moderate momentum with a score of 63/100, suggesting a neutral price trend without strong directional conviction. Revenue growth stands at 143.7% year-over-year, while a beta of 1.26 reflects its sensitivity to broader market moves. Moderate momentum may indicate the stock is consolidating or transitioning between trends, warranting close monitoring of upcoming catalysts.
With a stability score of 49/100, AVAV exhibits average financial resilience. Key stability metrics include a beta of 1.26 and a debt-to-equity ratio of 17.00x (sector avg: 0.2x). While the balance sheet is not a major concern, the stock is subject to typical market volatility and may experience sharper drawdowns during risk-off episodes.
AVAV carries a short interest score of 77/100, indicating moderate short selling activity. This is a neutral reading — not enough to signal systemic bearishness, but worth monitoring. Specific risk factors include above-average market sensitivity (beta: 1.26), elevated leverage (D/E: 17.00x). At $18.5B market cap (large-cap), AeroVironment Inc offers reasonable institutional liquidity.
AeroVironment Inc is a large-cap company in the Manufacturing sector, ranked #0 of 50 in its sector (100th percentile) and #2896 of 7,333 overall (61st percentile). Key comparisons include ROE of -0.9% exceeding the -2.5% sector median and operating margins of -0.3% below the 1.3% sector average. This top-quartile standing reflects exceptional competitive strength relative to Manufacturing peers.
While AVAV currently exhibits a REDUCE profile, superior opportunities exist within the MANUFACTURING sector. Our model identifies several "Strong Buy" candidates with higher quality scores and more attractive valuations among direct industry competitors.
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Improvement in Investment (17) would have the largest impact on the composite score.
EV/EBITDA 1091% ABOVE SECTOR MEDIAN
ROE 63% BELOW SECTOR MEDIAN
Gross Margin 17% BELOW SECTOR MEDIAN
AUDIT DATA AS OF AUG 2, 2025 (Q2 FY2025)
We rate AeroVironment Inc (AVAV) as a Reduce with a composite score of 44.4/100 at a current price of $262.06. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential and elevated risk of underperformance relative to peers over the next 12 months.
The rating is primarily driven by strength in momentum (63th percentile) and stability (49th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (17th percentile) and quality (40th percentile) tempers our overall conviction. We assign a No Moat rating (35/100), High uncertainty, and Poor capital allocation.
Key items to watch: sustainability of the current growth rate; the path to profitability. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.
AeroVironment Inc holds a top-quartile position (#0 of 50) within the Manufacturing sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 44.4/100 places it at rank #2896 in our full 7,333-stock universe. With a $18.5B market capitalization, AeroVironment Inc operates at meaningful scale within the Manufacturing sector, providing competitive advantages in distribution, procurement, and customer reach.
The near-term outlook is constructive, with revenue growing at 144% and momentum in the 63th percentile confirming positive market sentiment and institutional accumulation. The combination of strong top-line growth and favorable price dynamics suggests the company is executing well on its growth strategy. Investment factor at the 17th percentile indicates reinvestment patterns that investors should monitor for sustainability.
The margin cascade tells an important story: gross margins of 35% (-7.3pp vs sector) narrow to operating margins of -0% (-1.6pp vs sector) and net margins of -0.2%, yielding a gross-to-net conversion rate of -0%. The significant margin erosion from gross to net suggests elevated operating expenses, high interest costs, or other structural drags that warrant monitoring.
At a current price of $262.06, AeroVironment Inc is trading near fair value based on current fundamentals. Our value factor score of 44/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.
The stock currently trades at EV/EBITDA of 136.5x (at a premium), P/B of 3.0x, P/S of 13.2x. We evaluate these multiples in the context of both absolute levels and sector-relative positioning to form our valuation view.
Revenue growth of 144% confirms the business is expanding its addressable market — growth at this level typically supports multiple expansion and attracts institutional capital.
A conservative balance sheet (17% D/E) provides financial flexibility for acquisitions, buybacks, or weathering economic downturns without dilution.
The Reduce rating (composite 44.4/100) reflects multi-factor weakness, and historically, stocks in this scoring range have underperformed the market by a meaningful margin.
Thin net margins of -0.2% provide limited cushion against cost pressures, competitive pricing, or macroeconomic headwinds — even small changes in costs could swing the company to a loss.
Elevated short interest (77th percentile) indicates that sophisticated market participants are betting against the stock.
We assign a High uncertainty rating to AeroVironment Inc. Key risk factors include current negative profitability (net margin -0.2%). The wide range of potential outcomes widens our fair value estimate and increases the possibility of permanent capital impairment. Investors considering this name should size positions accordingly and demand a meaningful margin of safety before initiating.
Specific risk factors that inform our assessment include: current negative profitability (net margin -0.2%). Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 49th percentile and quality factor at the 40th percentile provide a quantitative summary of the overall risk landscape.
Key risk mitigants include: conservative leverage (17% D/E) limits balance sheet risk. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile warrants caution and disciplined position management.
We rate AeroVironment Inc's capital allocation as Poor. Key concerns include low returns on equity (-0.9%), negative profitability, weak asset returns (ROA -0.7%). Exemplary capital allocators generate ROE above 20% and maintain conservative leverage — AeroVironment Inc significantly underperforms these benchmarks, raising questions about management's ability to create shareholder value.
Investors should scrutinize management's reinvestment decisions and balance sheet trajectory before committing capital. Poor capital allocation often compounds over time: overlevered balance sheets limit strategic flexibility, while low returns on capital destroy shareholder value. We would need to see sustained improvement in profitability metrics and balance sheet discipline before considering an upgrade.
In summary, AeroVironment Inc receives a Reduce rating with a composite score of 44.4/100 (rank #2896 of 7,333). Our quantitative framework assigns a No Moat (35/100, trend: stable), High uncertainty, and Poor capital allocation. The average factor score across quality, value, momentum, stability, and investment is 42/100.
Our analysis does not support a constructive view on AeroVironment Inc at this time. The combination of limited competitive advantages, high uncertainty, and poor capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.
Analysis derived from Blank Capital Research quantitative terminal. For informational purposes only. No trade solicitation. Past performance not indicative of future results. Consult a qualified advisor.
We do not assign AeroVironment Inc a meaningful economic moat, scoring 35/100 on our composite assessment. The ROIC-WACC spread of -23.5% is the primary signal of economic value creation. Current fundamentals do not demonstrate the kind of durable competitive advantages — such as superior returns on invested capital, margin superiority, or reinvestment efficiency — that would protect the company from competitive erosion over the long term. The highest-scoring pillar, growth durability, reached only 11.1/20.
The strongest moat sources are growth durability (11.1/20) and margin superiority (10.7/20). Rev growth 144%, 11yr history. GM 35% vs sector 43%, OM -0% vs sector 1%. These pillars form the core of AeroVironment Inc's competitive identity and are the primary drivers of excess returns in our framework.
Areas of relative weakness include economic value creation (1.3/20) and reinvestment efficiency (4.2/20). ROIC -14.1% vs WACC 9.4% (spread -23.5%). Improvement in these areas could meaningfully widen the moat over time, while deterioration would be an early warning of competitive erosion.
Our moat trend assessment is Stable. Multi-year ROIC and operating margin trajectories show neither meaningful improvement nor deterioration, suggesting the competitive position is steady. We expect AeroVironment Inc's moat profile to remain largely unchanged absent a material shift in return on capital or industry dynamics.
Key profit drivers include gross margins of 35% providing a solid profitability foundation, robust top-line growth of 144% expanding the revenue base. The margin cascade from 35% gross to -0% operating to -0.2% net reveals the company's cost structure and reinvestment intensity. Our analysis indicates that profit quality raises some durability concerns, with the quality factor at the 40th percentile.
The margin profile shows gross margins of 35%, operating margins of -0%, net margins of -0.2%. Return metrics include ROE of -0.9% and ROA of -0.7%. Relative to the Manufacturing sector, gross margins are 7.3 percentage points below the sector median of 43%, and ROE of -0.9% compares to a sector median of -2.5%.
The balance sheet reflects a conservatively managed balance sheet with D/E of 17%, revenue growth of 144%. The sector median D/E is 0%, putting AeroVironment Inc at higher leverage than the typical peer. Overall balance sheet health is adequate for the current business environment.
Above 50MA
37.18%
Net New Highs
+51081
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