AeroVironment: Transforming Military UAVs Into Mailmen?


Todd Campbell

Amazon (AMZN) captured the world’s attention last week, announcing on the popular news TV show 60 Minutes that the future of commercial delivery rests in unmanned drones.

So far, no one is talking about who might make those drones, but one of the companies likely being considered is AeroVironment (AVAV) — one of the biggest manufacturers of unmanned aerial vehicles, otherwise known as drones, or UAVs.

Clients are more likely to pack heat than Styrofoam peanuts.

AeroVironment UAVs are primarily sold to the Department of Defense and its allies. But with that market penetrated and wars in the Middle East winding down, AeroVironment is dropping hints future demand will be commercial rather than military.

“We continue to lay the groundwork for 3 additional important growth opportunities that we expect to drive significant revenue growth in 2 to 5 years. These opportunities include commercial,” said CEO Timothy Conver during AeroVironment’s Q3 conference call.

Whether those commercial opportunities will include Amazon is anyone’s guess.

However, the company is one of the most experienced at building easy-to-use UAVs capable of carrying payloads. Importantly, AeroVironment already has the integrated GPS and contact avoidance systems necessary to make sure its UAVs go where they’re intended, without colliding with trees, telephone wires, or each other.

AeroVironment’s UAV portfolio includes the Raven and Puma, which are light weight UAVs already being used for wildlife and agriculture monitoring. In a nod to potential commercialization in other markets, the company won FAA approval in July for commercial use of the Puma AE in the Arctic.

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