AIRO to expand US operations with new manufacturing facility

ALBUQUERQUE/MONTREAL/WASHINGTON - AIRO (NASDAQ:AIRO), an aerospace and defense technology company with a market capitalization of $754 million, announced plans to establish a new manufacturing and engineering development facility in the United States, according to a press release issued Monday. The company’s stock has shown remarkable momentum, gaining over 35% in the past week. According to InvestingPro data, AIRO maintains impressive gross profit margins of nearly 67%.

The expansion aims to increase production capacity for the company’s RQ-35 ISR Drone, which has gained traction in defense and security sectors. The unmanned aircraft, also known as the RQ-35 Heidrun in military applications, has accumulated hundreds of thousands of operational hours and has been deployed in electronic warfare and GPS-denied environments.

"Like our current manufacturing facilities in the U.S. and Europe, which are AS9100-certified, our intent is for this new site to meet the same rigorous aerospace quality standards," said Joe Burns, CEO of AIRO.

The planned facility will focus on scaling production to compete for American-made defense and commercial opportunities while serving as a development center for future unmanned aircraft systems. The company indicated the site will support ongoing enhancements to the RQ-35 and development of next-generation autonomous mini drones.

Dr. Chirinjeev Kathuria, Executive Chairman of AIRO, noted that the company’s drone business has expanded due to adoption by NATO countries, with systems being used in active conflict zones.

AIRO operates across four segments: Drones, Avionics, Training, and Electric Air Mobility. The company did not disclose the specific location, investment amount, or timeline for the new facility in its statement.

In other recent news, AIRO Group has been the focus of several analyst evaluations following its recent developments. Mizuho maintained its Outperform rating and set a $31.00 price target, noting the U.S. Defense Department’s reforms in drone procurement as potentially beneficial for AIRO Group. These reforms aim to streamline acquisition processes and enhance the Blue UAS List, which could open up opportunities for certified manufacturers like AIRO. Cantor Fitzgerald initiated coverage with an Overweight rating and a $35.00 price target, citing AIRO’s growth potential in defense technology and its strategic reinvestment in EVTOL prospects. The firm highlighted ongoing RQ-35 orders from NATO partners and potential Department of Defense Blue UAS certification as positive growth drivers.

BTIG also initiated coverage on AIRO Group with a Buy rating and a $26.00 price target, emphasizing the company’s strengths in the Drones segment amid rising global security concerns. The firm’s analysis pointed to AIRO’s Electric Air Mobility approach as having a promising outlook due to recent federal initiatives. Additionally, Mizuho initiated coverage with an Outperform rating and highlighted the company’s IPO as providing capital to pursue opportunities across its core segments. The firm noted AIRO’s significant drone backlog and projected segment revenue of approximately $200 million by 2028, with further expansion plans into NATO countries and the U.S. market.

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