AeroVironment shares stayed steady after news that the company received a stop work order from the US Department of War tied to its BADGER antenna systems project.
RBC Capital confirmed the pause on Tuesday and kept its Outperform rating on the stock. The firm also stood by its $375 price target, signaling confidence despite the setback.
The stop work order was issued by mutual agreement. It allows both sides to sit down and rework the contract terms. The new deal is now expected to move to a firm fixed price model instead of the current structure.
Company management does not see this as the end of the program. They expect to remain involved and believe a revised contract could be signed within about 90 days.
RBC estimates the BADGER program was expected to bring in around $175 million in revenue during fiscal 2026. Most of that money was projected to land in the second half of the year. Because of the pause, near-term revenue growth could take a hit.
At the same time, analysts note there could be a silver lining. A firm fixed price contract may help improve profit margins later in 2026 once deliveries begin.
Earlier this year, AeroVironment had already told investors that BADGER was moving out of development and into full product delivery. While management expected contract changes, the sudden stop order came as a surprise.
The pause may slow the revenue ramp for the company’s Space, Cyber, and Directed Energy segment. Still, management remains confident in the long-term future of the program, even if some parts of the work are reduced.
Overall, analysts see this as a temporary speed bump rather than a serious threat to AeroVironment’s broader growth story.
