AeroVironment, Inc. (AVAV): fair value, margin of safety and Wheel Score

Is AVAV undervalued?

AVAV closed at 123.22 on 16 Oct 2026, more than 30% above the GLS average fair value of 3.54. Only 0 of the 1 models that produced a value sit above the price. By our models the shares are priced well beyond what the filed earnings, cash flow and book value support; the Sunday Scan drops names like this at the "below fair value" rule.

Only 1 of the nine models produced a value (10 Cap); the others need a dividend, positive free cash flow or positive book value the company does not have yet, so the average rests on a narrow base.

The nightly engine files AVAV under Speculative / Distressed - negative earnings or a Piotroski score of 3 or less - which caps its Wheel Score at 45 and keeps it out of the Sunday Scan.

Nine valuation models for AVAV

Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.

Quality and financial health

Financial health is weak: AVAV passes 3 of the nine Piotroski tests. Our screens drop the stock at the health rule; a low score is often the reason a stock looks cheap on the valuation models. The GLS Moat score is low at 2.4 out of 10, which says the ten-year record of revenue, earnings, margins and returns on capital has been inconsistent - growth and shocks rather than steady compounding.

Returns on capital are thin or negative - ROIC -5.1%, ROE -6.0%, ROA -4.6% - with debt at 0.19 times equity and a free-cash-flow yield of 0.0%.

AeroVironment, Inc. pays no dividend, so the DDM model does not apply and a covered-call holder earns only the premium and any price gain. Revenue comes mainly from Precision Strike and Defense Systems 41%, Space, Cyber and Directed Energy 28%, Ux S 25% (quarter Q1 FY2027).

Institutional ownership scores 8/10, insider activity 1/10 and Congressional trading 1/10 on the GLS smart-money scales.

Wheel Score 45: Weak

AVAV scores 45 out of 100 on the Wheel Score, in the Weak band (under 50), capped at 45 because the engine files it as Speculative / Distressed. Value 0/25, Health 7/20, Moat 4/15, Premium 20/20, Stability 18/20. The score is not a judgement on the company; it says the price, quality and premium do not line up for selling puts on it today.

Implied volatility is 59% on the near-the-money contracts 20-60 days out - inside the 35-60% range the Wheel Score pays full marks for: enough premium to be worth selling, not so much that the risk is unpaid. The option chain is deep: 52,724 contracts of open interest across all expiries, which means tight fills at most strikes.

Volume runs at 1.5M shares a day on a market cap of $6.3B, with a beta of 1.36 - a high beta, so the stock tends to move more than the market and a strike can be gapped through; the Stability part of the Wheel Score gives that 18 of 20.

The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls; it is updated nightly and is not a recommendation. The walkthrough lesson shows how the score fits into a trade, start to finish.

Upcoming events

The next earnings report is due on 8 Dec 2026, 53 days away - outside the window of a 30-45-day put sold today.

Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.

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