AeroVironment (AVAV) has addressed booking and margin concerns with robust fiscal Q1 results, RBC Capital Markets said in a Tuesday report.

The note said its legacy portfolio showed very strong growth in the quarter while BlueHalo's portfolio outlook was encouraging.

It added that bookings were just shy of $400 million in the quarter with funded backlog growing to $1.1 billion.

"Although the book-to-bill was sub-1x, we believe the outlook for

bookings is likely to meet investors' expectations coming out of 1Q26," the report said.

RBC analysts also said they are raising their estimates to reflect the strong Q1 results.

"The strong orders expected in 2Q - 3Q could provide a higher growth path than previously thought," they said. RBC kept its outperform rating and $300 price target.

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