AeroVironment (AVAV) – Investor Day Takeaways
AeroVironment (AVAV) hosted an Investor Open House on September 30th in Albuquerque, New Mexico.
RBC Capital would highlight that the company didn’t provide any updates to financial guidance or its outlook, but provided “a strong narrative as to why it believes it is uniquely positioned to benefit from the current U.S. and international defense budget environment.” Importantly, the company also highlighted what it views as the $75B TAM for its various product lines.
Cantor Fitzgerald came away from the event saying today’s facility tours bode well for future contracts as the U.S. Army embarks on its urgent modernization journey, characterized by agile networking, drones and next-gen air defense systems (lasers / interceptor munitions).
Stifel analyst Jonathan Siegmann would do a nice job of diving into different programs the company has to offer:
SCAR Program – This stands for Satellite Communication Augmentation Resource. This program is AVAV’s $1.7B franchise to replace the Space Force’s antiquated ground satellite dishes with new higher-capacity phased array antenna systems. The company will deliver the first BADGER unit to the Space Force later this year. AVAV announced a new task order for 2 additional units in September. “This award occurred sooner than AVAV expected and indicates the high priority focus this program is for the Space Force.” Meanwhile, any announced participation in Golden Dome will also be received positively.
Laser Communications – Included in the investor tour was the production building of AVAV’s laser terminals. Earlier in September, AVAV announced a landmark $240M laser terminal award. This contract represented AVAV’s next-gen long-haul laser communication terminals transitioning from development to orbit – a significant milestone for the technology. “AVAV has proven flight heritage and demonstrated success in connecting satellites in space thousands of miles apart with a laser beam as thin as human hair locked onto a target the size of a half-dollar. Maintaining a stable laser is of critical importance and AVAV’s secret sauce comes from their ability to unify tech across multiple legacy BlueHalo platforms. With 2-6 laser terminals used on satellites, AVAV has high leverage to grow from the increased number of MEO and GEO satellites planned for launch.”
TITAN – This is AVAV’s Autonomous RF Counter-Drone Detect & Defeat offering which is designed to plug-and-play with other systems and be easily upgraded. The company’s LOCUST laser weapon system adds a 30kw directed energy weapon to engage drone targets. Drone kills can be completed within 2 seconds which makes the platform especially well-suited to defend against drone swarms. “The controls are simple and use an X-box controller allowing for even a clumsy equity research analyst to be trained as a drone-fighting operator within minutes.”
AVAV, who is partnered with Leonardo DRS (DRS), completed delivery of the first two mobile counter-drone laser weapon systems to the US Army Rapid Capabilities and Critical Technologies Office as part of the first increment of the Army Multi Purpose High Energy Laser (AMP-HEL) prototyping program. Upcoming catalysts could include: More awards, greater disclosures of the Army’s specific laser platform plans, and any confirmation of AVAV’s systems direct involvement in Golden Dome.
