AVEX · AEVEX
Conviction · Medium · more likely to lead the S&P 500 over the next three months, by a modest margin
Wrong if: a daily close below $11.00
Updated ·
Price against the kill line
13.7% clear of its kill line on the 13 November 2026 close.
How to read this
The red mark is the price level of the published kill line: a close through it would prove the research note wrong on price. The dot is where the stock closed on 13 November 2026; a dot left of the mark has closed through its line.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close below $11.00, set on 12 November 2026. The shares are down 38.1% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close below $11.00, under the $12.13 close of 11 November 2026 before the third-quarter report, which would show the market rejecting the raised 2026 outlook. Full-year 2026 revenue below the $820 million low end of the guide would also break the case.
Research onlyNot in the portfolio.
Key figures from the filings · Industrials
Quarter to 30 September 2026, filed 12 November 2026
- Revenue, latest quarter ($M)
- 190
- Revenue, change on a year (%)
- +56.5
- Gross margin (%)
- 28.8
- Operating margin (%)
- 6.8
- Net cash, cash less debt ($M)
- −93.9
All filed numbers
What AEVEX reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| filed | 190 | +56.5 | 28.8 | 6.8 |
| filed | 202 | +99.5 | 23.6 | 7.6 |
| filed | 121 | — | 25.0 | 9.5 |
| filed | 101 | — | 18.2 | −3.5 |
| Pre-tax income ($M) | 25.0 |
| Net income ($M) | −23.9 |
| Diluted shares, change on a year (%) | Not available |
| Operating cash flow ($M) | Not available |
| Capital spending ($M) | Not available |
| Free cash flow ($M) | Not available |
| Cash and short-term investments ($M) | 78.6 |
| Debt ($M) non-current long-term debt plus current maturities | 173 |
| Net cash, cash less debt ($M) | −93.9 |
| Deferred revenue ($M) | 46.8 |
| Backlog, orders not yet delivered ($M) | 444 |
| Receivables ($M) | 125 |
| Inventory ($M) | 20.6 |
| Shareholders' equity ($M) | 6.5 |
| Market value ($M) | 746 |
| Enterprise value, market value plus net debt ($M) | 840 |
| Enterprise value to sales (×) | Not available |
| Enterprise value to operating income (×) | Not available |
| Price to earnings (×) | Not available |
| Price to book value (×) | 114.2 |
| Free-cash-flow yield (%) | Not available |
Short interest (FINRA, settled 15 October 2026, published 13 November 2026): 6.8% of shares outstanding sold short, 2.4 days of average trading to cover, +12.3% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $0 |
| 12 monthsfrom | $0and 5 trades without a stated price | $59.1M |
The thesis
AEVEX's core drone and maritime business now outgrows its shrinking Ukraine work. The raised 2026 outlook from 11 November 2026 makes the shares modestly more likely than not to beat the S&P 500 over the next three months. The 2027 outlook at the fourth-quarter report settles the case, along with whether orders arrive under the new contract with a ceiling of nearly $400 million.
The rating is Medium. The evidence is strong. In the third quarter, core revenue overtook Ukraine-related revenue for the first time since the second quarter of 2025 (11 November 2026 earnings call). The company raised full-year revenue guidance to $820–840 million, from $700–720 million. The case stops short of High because management gave no 2027 guidance, and Ukraine revenue winds down after the fourth quarter.
The price already reflects heavy doubt about the business after the Ukraine work ends. The shares closed at $12.13 on 11 November 2026, below the $20 initial public offering (IPO) price set on 16 April 2026, and were down 41.9% over three months on adjusted daily closes.
Bullish and bearish views on AEVEX Corp.
The bull case on AEVEX Corp. (AVEX), in brief: core revenue nearly tripled this year. The bear case: Ukraine revenue is running off.
Bull case
- Core revenue nearly tripled this year. Core revenue rose from $49.0 million in the first quarter to $137.2 million in the third, and management guides full-year 2026 core revenue to $440–460 million (Q3 2026 earnings slides, 11 November 2026).
- Guidance raised well above estimates. Full-year 2026 revenue guidance went to $820–840 million, against a $743.05 million consensus estimate, and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) guidance went to $128–132 million from $105–111.5 million (company release, 11 November 2026).
- Orders outpace revenue. Third-quarter core bookings were $250.2 million, a core book-to-bill (orders divided by revenue) of 1.56, and funded backlog reached $444.3 million at quarter end (11 November 2026 earnings call).
- New contract adds visibility. On 10 November 2026 the company won a single-award indefinite-delivery/indefinite-quantity (IDIQ) contract for unmanned aircraft systems with a ceiling of nearly $400 million. Management expects margins in line with core Airborne Systems.
- Margins and cash flow improving. Third-quarter adjusted EBITDA was $30.8 million, a 16.2% margin, against $17.8 million (14.6%) a year earlier. Nine-month free cash flow was $34.6 million (11 November 2026 earnings call).
Bear case
- Ukraine revenue is running off. Ukraine-related revenue fell from $167.7 million in the first quarter to $52.5 million in the third. Management projects about $36.3 million in the fourth quarter, then a wind-down (Q3 2026 earnings slides, 11 November 2026).
- No 2027 guidance yet. Management cited about $855 million of "near-term revenue visibility" from funded backlog plus expected conversion of unfunded awards, but issued no formal 2027 outlook (11 November 2026 earnings call).
- Half the raise is acquired. Management said roughly half of the increase at the guidance midpoint came from rolling in BlackSea, the maritime business acquired in September 2026. That acquisition was paid for partly with 12.7 million new Class A shares and a $75 million term-loan draw (11 November 2026 earnings call).
- GAAP loss in the quarter. The company reported a third-quarter net loss of $16.8 million, driven by a one-time $37.9 million deferred tax expense tied to the acquisition. It had net income of $9.9 million a year earlier (11 November 2026 earnings call).
- Analysts split on value. On 12 November 2026, Needham kept a Buy rating but cut its target to $30. Piper Sandler kept a Neutral rating and raised its target to $15 (company news).
Price setup
The shares listed on the New York Stock Exchange (NYSE) on 17 April 2026 after pricing at $20 on 16 April 2026. On adjusted daily closes they are down 41.9% over three months. The 11 November 2026 close of $12.13 came before the report. Investing.com reported the shares at $13.38 in after-hours trading that evening. Company news on 12 November 2026 reported the shares rising sharply in that session.
The 50-day moving average stood at $14.13 as of the 11 November 2026 close, above the last close. A sustained move back over that average would show the post-report gain holding. A slide back under the 11 November 2026 close would show the market discounting the raised outlook.
Catalysts ahead
- ~31 December 2026 (est.): First task orders under the nearly $400 million unmanned aircraft systems IDIQ. Management expects orders later in 2026 but said timing may slip. Funded orders would turn the contract ceiling into backlog behind 2027 core growth.
- ~15 March 2027 (est.): Fourth-quarter and full-year 2026 report, with any 2027 outlook. Shows whether full-year revenue lands inside the $820–840 million guide and whether core and maritime growth can offset the end of Ukraine-related revenue in 2027.
What would change the view
A daily close below $11.00, under the $12.13 close of 11 November 2026 before the third-quarter report, which would show the market rejecting the raised 2026 outlook. Full-year 2026 revenue below the $820 million low end of the guide would also break the case.
The risks this note tracks, each with what would confirm it:
- The end of Ukraine-related revenue leaves 2027 total revenue below 2026 levels. Confirmed by: a 2027 outlook at the fourth-quarter report that implies total revenue below the 2026 guidance range.
- US budget delays under a continuing resolution push orders out and slow bookings. Confirmed by: no funded orders under the nearly $400 million IDIQ by the fourth-quarter report, and a core book-to-bill below 1.0 for the fourth quarter.
- Maritime Systems backlog runs off as BlackSea sustainment work ends. Confirmed by: maritime Systems funded backlog reported below $172.3 million at the fourth-quarter report.
- Acquisition financing raises leverage or adds share dilution. Confirmed by: a draw on the $200 million revolver or a new equity issuance disclosed in a filing before the fourth-quarter report.
What it trades with
Most revenue comes from US Department of War customers, so the shares respond to US defense budget news. Management said a continuing resolution mainly affects timing, and that reconciliation funding is not in its base case (11 November 2026 earnings call). Ukraine-related revenue ties part of the year's results to US support for Ukraine, a link that weakens as that work ends after the fourth quarter. The stock trades as a recently listed defense drone company. Its moves since the IPO have been large, so company-specific news has driven it more than the broad index.
Notes
- AEVEX listed on the NYSE on 17 April 2026 after an IPO priced at $20 per share, so its trading history as a public company is short.
- The listed security is Class A common stock. The company issued 12.7 million Class A shares to the seller of BlackSea as part of the September 2026 acquisition.
- Part of 2026 revenue comes from Ukraine-related work that management expects to wind down after the fourth quarter of 2026.
The evidence, claim by claim (8)
- Third-quarter revenue was $189.7 million, up 56.5% year over year; adjusted EBITDA was $30.8 million, a 16.2% margin. AEVEX Q3 2026 results and earnings call · as of
- Full-year 2026 revenue guidance was raised to $820–840 million from $700–720 million; adjusted EBITDA guidance was raised to $128–132 million from $105–111.5 million. AEVEX Q3 2026 results release · as of
- Third-quarter core revenue was $137.2 million against $52.5 million of Ukraine-related revenue; fourth-quarter Ukraine revenue is projected at about $36.3 million. AEVEX Q3 2026 earnings slides · as of
- Funded backlog was $444.3 million, including $172.3 million from Maritime Systems; core book-to-bill was 1.56 on $250.2 million of core bookings. AEVEX Q3 2026 earnings call · as of
- Third-quarter net loss was $16.8 million, including a one-time $37.9 million deferred tax expense tied to the BlackSea acquisition. AEVEX Q3 2026 earnings call · as of
- Cash was $78.6 million and total debt $172.5 million at quarter end, with a $200 million revolver undrawn. AEVEX Q3 2026 earnings call · as of
- AEVEX was awarded a single-award IDIQ contract for unmanned aircraft systems with a ceiling of nearly $400 million for a US customer. AEVEX press release · as of
- Needham cut its price target to $30 with a Buy rating; Piper Sandler raised its target to $15 with a Neutral rating. Analyst actions reported 12 November 2026 · as of
Sources
- AEVEX Q3 2026 slides: core business surges as Ukraine revenue fades · uk.investing.com ·
- AEVEX (AVEX) Q3 2026 Earnings Call Transcript · fool.com ·
- AEVEX Q3 2026 Earnings Call Transcript · benzinga.com
- AEVEX Corp. Announces Pricing of Initial Public Offering · businesswire.com ·
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