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AeroVironment enters mid-October with its short position at a fresh high and the borrow market reversing the brief loosening that defined last week's note.
Since the October 8 article, both dimensions of the short story have moved in the same direction. Short interest has climbed further to 10.7% of the free float, up 8.3% on the week and now 30.5% above where it was a month ago. That monthly build is the fastest sustained pace in the 30-day window. The previous note flagged that availability had loosened to around 47%, easing pressure in the lending pool even as more shares were being shorted. That dynamic has now reversed sharply. Availability has tightened back to 15.8%, down more than 20% in a week, returning close to the levels seen in early October before the brief loosening. The 52-week low in availability was 8.4%, so there is further room to squeeze, but the direction of travel is clear. Cost to borrow has moved with it, jumping 38% on the week to 1.22%, its highest reading in the 30-day history. The borrow market is telling a more strained story than it was seven days ago.
Options positioning offers a mild counterpoint. The put/call ratio is 0.78, sitting almost exactly at its 20-day average of 0.77, with a z-score near zero. That is a notable contrast to the elevated short positioning: options traders are neither piling into puts nor pressing calls, they are sitting in neutral. The 52-week PCR range runs from 0.44 to 1.07, so current readings are far from either extreme. The short score, at 68.8 on the ORTEX scale, has been stable to slightly higher across the past ten days and ranks in the bottom 5th percentile of the universe for short-score rank, a consistently bearish positioning read.
The Street is split but tilts constructive on the fundamentals. Barclays initiated coverage this week at Equal-Weight with a $237 target, while Rothschild initiated at Neutral with a $165 target, framing the range of near-term scepticism. Among existing holders, JPMorgan raised its target to $210 after the last earnings print and Jefferies and BofA both cut targets while keeping Buy ratings. The consensus mean target is $216, implying roughly 70% upside from the current $127.13, a gap that reflects both the bull case and the 13% decline over the past month. Bulls point to a record funded backlog of $1.5 billion, up 37% year-on-year, and a 1.4x book-to-bill. Bears focus on negative free cash flow, the loss of the FTUAS program, and execution risk around BlueHaro integration. The EV/EBITDA multiple has compressed to 17.1x, down about 0.7 points over 30 days, tracking the share price lower without a meaningful re-rating relative to the move.
One ownership detail is worth carrying forward. Altitude V Holdings, a Schedule 13D activist filer, last disclosed a 13.5% stake in June, reduced from 14.7% previously. An activist on the 13D register is one of the more newsworthy structural facts about the stock. That said, 13D positions are event-driven disclosures around the 5% threshold, stakes are as last disclosed, and a holder can fall below 5% without filing again. The largest passive holder is Arlington Management at 23.8% of shares, unchanged in the most recent data. BlackRock added around 243,000 shares to reach 6.9% as of September 30. Recent insider activity has been limited to small planned sales under 10b5-1 programmes, with a net 90-day figure of negative $221,000 across fewer than 1,400 shares, not a meaningful signal in either direction.
The next earnings event is December 9. With short interest at cycle highs, availability tightening again, and the stock down 11% in a week, the question heading into that print is whether the backlog momentum and bookings strength the bulls are counting on translates into a free cash flow profile that narrows the gap with the bear case.
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