AeroVironment heads into the final stretch of September with its stock down 8.3% on the week and options traders pricing in the most defensive posture seen in months.
The clearest signal this week is in the options market. The put/call ratio has climbed to 0.85, more than 2.6 standard deviations above its 20-day average of 0.73. That is the sharpest defensive skew of the past year outside of the 52-week high of 1.08, and it arrived in the same week the stock fell from roughly $156 to $143.24. The acceleration in put demand has tracked the price weakness closely: the PCR was below 0.68 as recently as mid-September and has risen almost every session since. Options positioning is telling a clear story about near-term caution.
The borrow market adds a supporting layer of bearish pressure. Short interest climbed 14% over the past month to 9.5% of the free float, a level that places AVAV in a meaningful minority of mid-cap defense names with double-digit float-short ratios. Availability has tightened to roughly 31%, meaning fewer than one share remains available for every three already borrowed, down from above 60% in late August. The 52-week low on availability was 8.4%, so there is room to tighten further, but the direction of travel has shifted noticeably this month. Cost to borrow remains low at 0.85%, down slightly on the week despite the month's 53% rise, so the squeeze dynamics are not yet extreme. The ORTEX short score of 67.4 ranks in the 5th percentile of its universe, flagging elevated bearish sentiment relative to peers.
The Street is broadly constructive but has been trimming ambitions. Analysts retain positive ratings across the board, with most reiterating Buy or Overweight, but two bellwether firms cut targets in mid-September: Jefferies lowered to $204 from $229 and B of A Securities reduced to $185 from $225, both maintaining Buy. JPMorgan moved the other way, nudging its target to $210 from $200 while holding Overweight. The mean target across the consensus sits near $219, implying roughly 53% upside from the current $143.24. That gap is wide, but it has widened primarily because the stock has fallen, not because analysts have grown more bullish. The bull case centres on a record $1.5 billion funded backlog, a 1.4x book-to-bill, and 71% year-over-year growth in the Autonomous Systems segment, plus the $465 million E-HEL award as evidence that directed-energy programs are scaling. Bears counter that the revenue base remains concentrated in US government contracts, that the $1 billion Future Tactical Uncrewed Aircraft System program was lost to a competitor, and that BlueHalo integration adds execution risk without near-term margin accretion. At a PE of 34.5x and EV/EBITDA near 20x, the valuation leaves little room for disappointment if any of those execution risks materialise.
One ownership detail is worth noting. Altitude V Holdings filed an amended Schedule 13D in June, disclosing a stake of 13.5%, down from 14.7% at its prior filing in May 2025. An activist on the 13D register is among the most significant structural facts about a stock. Altitude first appeared on the register in May 2025, and the modest trim does not change the activist posture. As with all 13D/G disclosures, the position is as last reported around the 5% threshold, and holders dropping below 5% may not file again. Arlington Management Employees holds 23.8% and has not moved its position, providing a large passive anchor. BlackRock added roughly 104,000 shares as of its August 31 report, a small but directionally constructive move by the index giant.
Insider activity is routine rather than revealing. Recent sales by director Stephen Page and Chief Accounting Officer Brian Shackley were both executed under pre-arranged 10b5-1 plans and involved small share counts, under $40,000 per transaction. The 90-day net is a modest 1,353 shares sold, with net value of about negative $221,000, not a signal of executive-level concern given the scale of those plans.
Wikipedia page views for AVAV registered a z-score of 2.1 against the stock's own 90-day history as of September 11, the highest retail attention reading in recent months. That spike in retail interest coincided with the earnings report on September 9 and the wave of analyst commentary that followed, rather than indicating a new catalyst.
Peers have not offered any shelter. KTOS fell 8.3% on the week, almost identical to AVAV's move. RCAT dropped 7.1% and RDW lost 8.8%. Only MRCY bucked the group, gaining 3.1% on the day. The sector-wide pressure suggests macro or policy-level concern is driving the move rather than anything company-specific.
The next scheduled earnings release is December 9. Between now and then, the key variables to track are whether short interest continues its month-long build toward the mid-September highs near 5.1 million shares, whether availability tightens further toward its 52-week floor, and whether the gap between the analyst consensus target and the current price begins to close through stock-price recovery or through further target reductions.
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