New York, March 3, 2026, 15:02 ET — Regular session
- AVAV jumped almost 11% as the company briefed investors on ongoing contract discussions with Space Force.
- Just a day earlier, the stock tumbled 17% as investors fretted the SCAR program might return to open bidding.
- Analysts remain divided on just how much backlog and earnings power might be in jeopardy here. More clarity should land March 10.
Shares of AeroVironment Inc jumped $22.80, or 10.9%, to $231.12 Tuesday afternoon, bouncing back as the defense tech firm confirmed it remains in negotiations with the U.S. Space Force regarding contract modifications for the SCAR program. The stock swung from $207.10 to $236.54, with trading volume topping its recent norm. 1
The stock clawed back after Monday’s brutal move, when AeroVironment plunged 17.4%. Pressure ramped up as the U.S. Space Force opted to reopen the Satellite Communications Augmentation Resource program, and Raymond James’ Brian Gesuale abruptly downgraded his call—cutting to underperform from strong buy. “Backlog is the precursor to revenue and adds uncertainty to our forward estimates,” Gesuale said in a note. (Backlog refers to booked work pending delivery.) 2
SCAR has become a lightning rod for investors — it’s sizable, and it occupies the chunk of the order book tied to longer-term growth bets. Stifel flagged that SCAR accounts for almost half of AeroVironment’s unfunded backlog, meaning projects anticipated but not fully funded yet. Still, the firm projects SCAR will contribute only 10% to 12% of next year’s revenue and earnings. 3
AeroVironment is putting over $30 million into its Albuquerque defense manufacturing site, the company and New Mexico officials said Tuesday. The expansion should add upwards of 450 jobs locally and could bring in more than $670 million in economic impact across the next ten years. “The growth we’re driving in Albuquerque goes beyond our own business,” CEO Wahid Nawabi said. 4
SCAR’s contract language is getting stricter. In a January 8-K, the company detailed a stop-work order as it worked out a new deal for the program, noting the revision would likely shift to a “firm-fixed-price” setup. Under that structure, contractors usually absorb any cost overruns themselves if production costs climb — not the government. 5
Jefferies analyst Greg Konrad stuck with his buy rating on Tuesday, calling the selloff overdone. He pointed out that the Space Force is aiming to reopen the SCAR program, hoping to add more vendors and bolster supply-chain resiliency for surge production. 6
Canaccord Genuity reduced its price target to $330 from $400, though it maintained its buy rating. The firm removed the rest of the SCAR revenue from its second-half fiscal 2026 model, but stressed the contract hasn’t actually been lost and could be renegotiated. 7
BTIG reaffirmed its buy rating and $415 price target Monday, describing the intraday slide as “overdone” given the contract was expected to make up about 6% of yearly sales. Still, analysts flagged that “headline risk” tied to SCAR probably isn’t going away anytime soon. 8
Still, the bearish scenario isn’t just theoretical. Piper Sandler slashed its price target on AeroVironment to $290 from $391, pointing to mounting risks for the company’s BADGER program after the Space Force’s recent decision. Analysts warned that if the contract heads back up for grabs, shares could stay under pressure for a while—even if AeroVironment keeps its spot in the mix. 9
On Tuesday, a regulatory filing revealed director Stephen F. Page offloaded 250 shares at $300 apiece on March 2, executing the trade under a Rule 10b5-1 plan set up in September 2025. 10
March 10 is circled on traders’ calendars. AeroVironment will drop its fiscal Q3 numbers after the bell. Investors want clarity: does SCAR stick with the revised roadmap or veer into a wider contest? The Albuquerque ramp-up is another wild card—could that shift delivery timelines? 11
