AVEX · AEVEX
Conviction · Medium · more likely to lead the S&P 500 over the next three months, by a modest margin
Wrong if: a daily close below $11.00
Note written ·
Price against the kill line
13.7% clear of its kill line on the 13 November 2026 close.
How to read this
The red mark is the price level of the published kill line: a close through it (a weekly close, on a weekly line) would prove the research note wrong on price. The dot is where the stock closed on 13 November 2026; a dot left of the mark has closed through its line.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close below $11.00, set on 12 November 2026. The shares are down 38.1% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close below $11.00, under the 13 November 2026 close of $12.51 and below every close since the third-quarter report, which would show the market rejecting the raised 2026 outlook. Full-year 2026 revenue below the $820 million low end of the guide would also break the case.
Research onlyNot in the portfolio.
The business · as of
AEVEX builds unmanned aircraft, including one-way attack drones, plus maritime systems and mission-support services. It sells them mainly to US defense customers under government contracts and reported third-quarter 2026 revenue of $190 million (Form 10-Q, filed 12 November 2026).
What is changing, and what follows · as of
- What is changing now
- On 11 November 2026 AEVEX raised its 2026 revenue outlook to $820–840 million from $700–720 million, as third-quarter core revenue of $137.2 million overtook $52.5 million of Ukraine-related revenue.
- What follows for the company
- Backlog reached $444 million at 30 September 2026, but cash fell to $79 million against $172 million of debt after the BlackSea deal, and operating margin was 6.8% against 9.5% a year earlier (10-Q, 12 November 2026).
- What follows for its customers, suppliers and competitors
- US defense customers gain a funded drone source under the nearly $400 million contract, which puts AEVEX in competition for the same budgets as AeroVironment (AVAV) and Kratos (KTOS), the listed peers named in IPO coverage.
What the price assumes · as of
At the 13 November 2026 close (filed inputs to 12 November 2026): market value $746 million, enterprise value $840 million, P/B 114.2 on equity of $6.5 million; EV/sales, EV/EBIT, P/E and free-cash-flow yield are not available. The price holds only if quarterly revenue stays near the $190 million of the 30 September 2026 quarter after Ukraine work ends, at an operating margin of at least that quarter's 6.8%.
Key figures from the filings · Industrials
Quarter to 30 September 2026, filed 12 November 2026
- Revenue, latest quarter ($M)
- 190
- Revenue, change on a year (%)
- +56.5
- Gross margin (%)
- 28.8
- Operating margin (%)
- 6.8
- Net cash, cash less debt ($M)
- −93.9
All filed numbers
What AEVEX reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 190 | +56.5 | 28.8 | 6.8 |
| first filed | 202 | +99.5 | 23.6 | 7.6 |
| first filed | 121 | — | 25.0 | 9.5 |
| first filed | 101 | — | 18.2 | −3.5 |
| Pre-tax income ($M) | 25.0 |
| Net income ($M) | −23.9 |
| Diluted shares, change on a year (%) | Not available |
| Operating cash flow ($M) | Not available |
| Capital spending ($M) | Not available |
| Free cash flow ($M) | Not available |
| Cash and short-term investments ($M) | 78.6 |
| Debt ($M) non-current long-term debt plus current maturities | 173 |
| Net cash, cash less debt ($M) | −93.9 |
| Deferred revenue ($M) | 46.8 |
| Backlog, orders not yet delivered ($M) | 444 |
| Receivables ($M) | 125 |
| Inventory ($M) | 20.6 |
| Shareholders' equity ($M) | 6.5 |
| Market value ($M) | 746 |
| Enterprise value, market value plus net debt ($M) | 840 |
| Enterprise value to sales (×) | Not available |
| Enterprise value to operating income (×) | Not available |
| Price to earnings (×) | Not available |
| Price to book value (×) | 114.2 |
| Free-cash-flow yield (%) | Not available |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 6.8% of shares outstanding sold short, 2.4 days of average trading to cover, +12.3% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $0 |
| 12 monthsfrom | $0and 5 trades without a stated price | $59.1M |
Linked companies · as of
- Competitors:
- AVAV, KTOS
The thesis
AEVEX's core drone and maritime business is growing fast enough to replace its fading Ukraine work, which makes the shares modestly more likely than not to beat the S&P 500 over the next three months. The case turns on first orders under the new contract with a ceiling of nearly $400 million and on the 2027 outlook expected with the fourth-quarter report.
The rating is Medium because the third-quarter report of 11 November 2026 delivered the core growth the case needs. Core revenue was $137.2 million against $52.5 million of Ukraine-related revenue (Q3 2026 earnings slides). Full-year 2026 revenue guidance rose to $820–840 million from $700–720 million, the third raise of the year (company release, 11 November 2026). The rating stops short of High because management has given no 2027 guidance and Ukraine revenue winds down after the fourth quarter.
The market has handed back much of the report-day gain. Benzinga reported the shares up 11.8% before the open on 12 November 2026, and MarketBeat reported them down 8.2% in the 13 November 2026 session. They closed at $12.51 on 13 November 2026, below the 50-day moving average of $14.02 and down 38.1% over three months on adjusted daily closes.
Bullish and bearish views on AEVEX Corp.
The bull case on AEVEX Corp. (AVEX), in brief: core revenue nearly tripled this year. The bear case: Ukraine revenue is running off.
Bull case
- Core revenue nearly tripled this year. Core revenue rose from $49.0 million in the first quarter of 2026 to $137.2 million in the third. The third quarter was the first since the second quarter of 2025 in which core revenue exceeded Ukraine revenue (Q3 2026 earnings slides, 11 November 2026).
- Third guidance raise of 2026. The full-year revenue guide went to $820–840 million, from $700–720 million after the second quarter and $600–620 million after the first. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) guidance rose to $128–132 million from $105–111.5 million (company release, 11 November 2026).
- Orders running ahead of revenue. Third-quarter core bookings were $250.2 million against total revenue of $189.7 million, and funded backlog was $444.3 million at 30 September 2026 (11 November 2026 earnings call). Management put unfunded backlog at $1.1 billion, about $410 million of it expected to become revenue by the end of 2027 (Earnings Whispers, 11 November 2026).
- New contract adds visibility. On 10 November 2026 the company won a single-award indefinite-delivery/indefinite-quantity (IDIQ) contract for unmanned aircraft systems with a ceiling of nearly $400 million. Management expects its margins to match the core Airborne Systems business (11 November 2026 earnings call).
- Main segment margins widening. Airborne Systems revenue rose 67.1% to $147.8 million, with a segment margin of 22.6% against 17.2% a year earlier (Earnings Whispers, 11 November 2026). Gross margin was 28.8% in the quarter against 25.0% a year earlier (Form 10-Q, filed 12 November 2026).
Bear case
- Ukraine revenue is running off. Ukraine-related revenue fell from $167.7 million in the first quarter to $52.5 million in the third. Management projects about $36.3 million in the fourth quarter, then a wind-down (Q3 2026 earnings slides, 11 November 2026).
- Total revenue down three quarters running. Total revenue went from $216.7 million in the first quarter to $201.8 million in the second and $189.7 million in the third (Earnings Whispers, 11 November 2026).
- Operating margin below a year ago. The 10-Q filed 12 November 2026 shows a third-quarter operating margin of 6.8%, against 9.5% a year earlier. Selling, general and administrative costs more than tripled to $29.3 million, and Global Solutions' segment margin fell to 5.4% from 14.3% (Earnings Whispers, 11 November 2026).
- Tax charge and a thin balance sheet. Pre-tax income of $25.0 million turned into a loss after a $41.7 million tax provision, $37.9 million of it a one-time deferred tax expense tied to the BlackSea acquisition. The loss was $0.40 a share against a $0.07 profit estimate (Benzinga, 11 November 2026). At 30 September 2026 the company held $79 million of cash against $172 million of debt, with equity of $6.5 million (Form 10-Q).
- Half the raise is acquired. Management said roughly half the increase at the guidance midpoint came from BlackSea, the maritime business that closed on 8 September 2026. The deal was paid for partly with 12.7 million new Class A shares and a $75 million term-loan draw (11 November 2026 earnings call).
- Analysts split on value. On 12 November 2026 Needham kept a Buy rating and cut its target to $30 from $45. Piper Sandler kept a Neutral rating and raised its target to $15 from $13 (Investing.com; Benzinga).
Price setup
The shares listed on the New York Stock Exchange on 17 April 2026 after the initial public offering (IPO) priced at $20 on 16 April 2026. They closed at $12.51 on 13 November 2026, well below the IPO price.
On adjusted daily closes the shares are down 38.1% over three months, and the 50-day moving average stood at $14.02 at the 13 November 2026 close. The report lifted the shares in the 12 November 2026 session, and the 8.2% decline reported by MarketBeat on 13 November 2026 gave back much of that move. A sustained close back above the 50-day average would show the market accepting the raised outlook. A further slide toward the pre-report trading range would show it discounting the core growth.
Catalysts ahead
- ~31 December 2026 (est.): First task orders under the nearly $400 million unmanned aircraft systems IDIQ. Management expects orders late in 2026 but said timing may slip. Funded orders would turn the contract ceiling into backlog behind 2027 core growth.
- ~15 March 2027 (est.): Fourth-quarter and full-year 2026 report, with any 2027 outlook. Shows whether full-year revenue lands inside the $820–840 million guide and whether core and maritime growth can offset the end of Ukraine-related revenue in 2027.
What would change the view
A daily close below $11.00, under the 13 November 2026 close of $12.51 and below every close since the third-quarter report, which would show the market rejecting the raised 2026 outlook. Full-year 2026 revenue below the $820 million low end of the guide would also break the case.
The risks this note tracks, each with what would confirm it:
- The end of Ukraine-related revenue leaves 2027 total revenue below 2026 levels. Confirmed by: a 2027 outlook at the fourth-quarter report that implies total revenue below the 2026 guidance range.
- US budget delays under a continuing resolution push orders out and slow bookings. Confirmed by: no funded orders under the nearly $400 million IDIQ by the fourth-quarter report, and fourth-quarter core bookings below core revenue.
- Maritime Systems backlog runs off as BlackSea sustainment work ends. Confirmed by: maritime Systems funded backlog reported below $172.3 million at the fourth-quarter report.
- Acquisition financing raises leverage or adds share dilution on a balance sheet with $6.5 million of equity. Confirmed by: a draw on the $200 million revolver or a new equity issuance disclosed in a filing before the fourth-quarter report.
- Supply-chain shortages in cameras, radios and engines, flagged by management on 11 November 2026, cap drone deliveries. Confirmed by: fourth-quarter Airborne Systems revenue below the third quarter's $147.8 million with management citing component shortages.
What it trades with
Most revenue comes from US Department of War customers, so the shares respond to US defense budget news. Management warned that a continuing resolution running into February or March 2027 could delay awards, and it now sees reconciliation funding as unlikely (Earnings Whispers, 11 November 2026). Ukraine-related revenue ties part of 2026 results to US support for Ukraine, a link that fades once that work ends after the fourth quarter. Coverage of the April 2026 IPO named AeroVironment (AVAV) and Kratos Defense & Security Solutions (KTOS) as the listed comparables, so the shares share drone-budget news with those names. Company-specific results have driven the shares more than the broad index since listing.
Caveats
- AEVEX listed on the NYSE on 17 April 2026 after an IPO priced at $20 per share, so its trading history as a public company is short. AEVEX Corp. Announces Pricing of Initial Public Offering, 16 April 2026 · as of
- The listed security is Class A common stock; the company issued 12.7 million Class A shares to the seller of BlackSea as part of the September 2026 acquisition. AEVEX Q3 2026 earnings call · as of
- Stockholders' equity was $6.5 million at 30 September 2026, so book-value multiples for the shares are extreme. Form 10-Q for the third quarter of 2026 · as of
- Part of 2026 revenue comes from Ukraine-related work that management expects to wind down after the fourth quarter of 2026. AEVEX Q3 2026 earnings call · as of
The evidence, claim by claim (8)
- Third-quarter revenue was $189.7 million, up 56.5% from a year earlier; adjusted EBITDA was $30.8 million, a 16.2% margin. AEVEX Q3 2026 results and earnings call · as of
- Full-year 2026 revenue guidance was raised to $820–840 million from $700–720 million; adjusted EBITDA guidance to $128–132 million from $105–111.5 million. AEVEX Q3 2026 results release · as of
- Third-quarter core revenue was $137.2 million against $52.5 million of Ukraine-related revenue; fourth-quarter Ukraine revenue is projected at about $36.3 million. AEVEX Q3 2026 earnings slides · as of
- Funded backlog was $444.3 million, including $172.3 million from Maritime Systems, on third-quarter core bookings of $250.2 million. AEVEX Q3 2026 earnings call · as of
- Third-quarter operating margin was 6.8% against 9.5% a year earlier; gross margin was 28.8% against 25.0%. Form 10-Q for the third quarter of 2026 · as of
- Cash and short-term investments were $79 million and debt $172 million at 30 September 2026, with stockholders' equity of $6.5 million. Form 10-Q for the third quarter of 2026 · as of
- AEVEX was awarded a single-award IDIQ contract for unmanned aircraft systems with a ceiling of nearly $400 million for a US customer. AEVEX press release · as of
- Needham cut its price target to $30 from $45 with a Buy rating; Piper Sandler raised its target to $15 from $13 with a Neutral rating. Investing.com and Benzinga analyst reports · as of
Sources
- AEVEX (AVEX) Q3 2026 Earnings Call Transcript · fool.com ·
- AEVEX Q3 2026 slides: core business surges as Ukraine revenue fades · uk.investing.com ·
- AEVEX's Tax-Driven EPS Miss Hides A Revenue Beat And Third Raise, But Shrinking Ukraine Sales Keep The Stock Near Lows · finviz.com ·
- AEVEX Analysts Revise Their Forecasts Following Q3 Results · benzinga.com
- Needham cuts Aevex stock price target to $30 on valuation reset · investing.com
- AEVEX (NYSE:AVEX) Stock Falls 8.2% Following Weak Earnings · marketbeat.com ·
- AEVEX Q3 2026 Earnings Call Transcript · benzinga.com
- AEVEX Corp. Announces Pricing of Initial Public Offering · businesswire.com ·
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