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Investing.com - Mizuho (NYSE:MFG) maintained its Outperform rating and $31.00 price target on AIRO Group (NASDAQ:AIRO), a $581 million market cap drone technology company with impressive 67% gross margins, following the U.S. Defense Department’s announcement of major reforms to drone procurement practices. InvestingPro data shows analyst targets ranging from $26 to $35.
U.S. Defense Secretary Hegseth outlined initiatives aimed at achieving U.S. domain dominance in unmanned aerial systems by 2027, addressing what Mizuho describes as inefficient procurement processes that have hindered fielding drones at the scale required for modern warfare. With trailing twelve-month revenue of $85 million and analysts forecasting significant sales growth this year according to InvestingPro, AIRO appears well-positioned to capitalize on these reforms.
The reforms focus on streamlining acquisition by rescinding restrictive policies, prioritizing commercial solutions through adaptive acquisition pathways, and enhancing the Blue UAS List via the Defense Innovation Unit that certifies compliant commercial drones.
The Blue UAS List will be expanded and updated monthly to include drones and components meeting National Defense Authorization Act standards, creating potential opportunities for certified manufacturers.
Mizuho characterized these developments as "incrementally positive" for AIRO Group, which operates in the unmanned aerial systems sector that stands to benefit from the DoD’s procurement reform initiatives.
In other recent news, AIRO Group has been the focus of several analysts, each initiating coverage with positive outlooks. Cantor Fitzgerald has rated AIRO Group stock as Overweight with a price target of $35.00, emphasizing the company’s growth potential in defense technology. They noted AIRO’s strategic reinvestment in EVTOL prospects and highlighted continued RQ-35 orders from NATO partners as a positive indicator for future performance. BTIG also initiated coverage with a Buy rating and a $26.00 price target, citing AIRO’s position in the aerospace and air mobility markets. They emphasized the potential for growth in the Drones and Electric Air Mobility segments, driven by recent federal initiatives. Mizuho rated AIRO Group as Outperform with a price target of $31.00, referencing the company’s recent IPO and capital availability. Mizuho highlighted AIRO’s substantial drone backlog and plans for expansion into additional NATO countries and the U.S. market. The firm provided EBITDA estimates for AIRO, projecting $19.1 million in 2025, $19.9 million in 2026, and $40.5 million in 2027.
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