AeroVironment soars 20% on record Q4 results, strong FY2026 outlook, and analyst upgrades; Ondas up 12%; Kratos up 2%.

AeroVironment's release of record-breaking fourth-quarter and full-year 2025 financial results, coupled with a robust outlook for fiscal year 2026 and multiple analyst upgrades.

The drone and tactical missile systems manufacturer reported record revenue for both Q4 and the full fiscal year 2025. Q4 revenue surged 40% year-over-year to $275 million, while full-year revenue reached $821 million, marking a 14% increase from the previous year. The company's performance was driven by strong demand for its innovative solutions, particularly in the Loitering Munitions Systems (LMS) segment, which saw an 87% revenue increase in Q4.

Adding to investor enthusiasm, AeroVironment provided an optimistic outlook for fiscal year 2026, setting revenue guidance between $1.9 billion and $2 billion. This projection includes the impact of the recently completed Blue Halo acquisition, which strengthens the company's position as a next-generation defense technology leader. The company's funded backlog stood at $726 million at the end of FY2025, up 82% from the previous year, indicating strong future growth potential.

Wall Street analysts have responded positively to AeroVironment's results and outlook. Raymond James raised its price target to $225 from $200, maintaining a Strong Buy rating, while RBC Capital Markets increased its target to $200 from $190. The average analyst rating for AVAV is Buy, with a mean price target of $209.71, suggesting further upside potential. The company's alignment with US Department of Defense priorities and its expanding international presence are seen as key drivers for future growth.