Market reaction and company statement
AeroVironment (NASDAQ:AVAV) shares rose 6.5% on Tuesday after the company said it is in active negotiations with the U.S. Space Force on a contract amendment for the Satellite Communications Augmentation Resource program - commonly referred to as SCAR. The firm said those discussions center on a firm-fixed-price contract to supply ground stations for the program.
The company described the contract as having been temporarily paused while AeroVironment and the Space Force work to align on a commercialized product solution that includes an expedited timeline for delivery. Management also confirmed investments to expand manufacturing capacity in Albuquerque, New Mexico, citing support needs for growth across its Space and Directed Energy platforms, including manufacturing related to the SCAR program.
Context of the recent stock moves
Tuesday's uptick followed a 17% drop in the previous trading session. That decline came after Raymond James analyst Brian Gesuale lowered his rating on the stock from Strong Buy to Underperform. Gesuale's note referenced the Space Force's announcement that it is recompeting the SCAR program.
The analyst characterized SCAR as the company's largest program of record with an approximate value of $1.4 billion and said the recompete has the potential to reduce AeroVironment's $2.8 billion reported backlog by $1 billion to $1.4 billion.
Analyst views and program reopening
Not all analysts interpreted the news the same way. Jefferies analyst Greg Konrad maintained a Buy rating and suggested the sell-off may have been excessive. The Space Force disclosed plans to reopen the $1.7 billion SCAR program to allow for new vendors and to bolster supply chain resiliency for potential surge production requirements.
Upcoming reporting timeline
AeroVironment is scheduled to release its third quarter fiscal 2026 financial results after the market close on March 10, 2026. The earnings release will come amid continued scrutiny of program awards, backlog composition, and the company’s stated capacity expansions.
Promotional product mention included in prior reporting
The earlier article included reference to ProPicks AI and InvestingPro services; those mentions reflected third-party promotional material present in the initial report and are not added financial guidance from the company.