AVAV or LHX: Which Stock Stands Stronger in Today's Defense Boom?

As global defense spending rises amid geopolitical tensions, companies like AeroVironment, Inc. AVAV and L3Harris Technologies, Inc. LHX are gaining increased attention from investors. Growing investments in unmanned systems, satellite communications, space hardware, cyber defense and advanced weapon systems position both firms to benefit from the defense industry’s ongoing expansion.

AeroVironment is known for its unmanned aerial vehicles and offers a full suite of space-qualified hardware trusted to fly in geosynchronous, medium and low Earth orbits as well as Cislunar orbits. On the other hand, L3Harris is a diversified defense contractor with a strong presence in communication systems, space, electronic warfare and tactical networks. With larger-scale operations, LHX plays a key role in delivering integrated solutions across multiple defense domains.

As countries enhance their defense capabilities with next-gen technologies, both AVAV and LHX are well-placed to benefit. Now, let’s take a closer look to determine which of these stocks presents a stronger investment case.

Key Takeaways for AVAV

AVAV has continued to make strong strides in the defense sector through key partnerships and strategic deals. In October 2025, AVAV received a $95.9 million contract from the U.S. Army to support the Long-Range Kinetic Interceptor program. Under this contract, the company will manufacture and deliver its Freedom Eagle (FE-1) kinetic Counter-Unmanned Aircraft System (C-UAS) missile as part of the Army’s Next-Generation C-UAS Missile initiative.

In the same month, AVAV signed a Memorandum of Understanding (MOU) with Korean Air to make it its main partner in the Republic of Korea. The partnership will focus on adapting AV’s JUMP 20 VTOL unmanned aircraft for Korea’s defense needs and will include plans for joint research, innovation and local production to support the country’s growing unmanned system capabilities.

Key Takeaways for LHX

LHX has also continued to make strong strides in the defense sector through key partnerships and strategic deals. In October 2025, L3Harris received a contract worth more than $2.26 billion to deliver modified Bombardier Global 6500 airborne early warning and control (AEW&C) aircraft to the Republic of Korea Air Force. In partnership with Bombardier, Israel Aerospace Industries’ ELTA Systems and Korean Air, the company will provide advanced aircraft designed to enhance mission readiness, extend flight range and improve threat detection and communication with U.S., NATO and allied forces.

In the same month, L3Harris signed a multi-year agreement with MHI RJ Aviation Group to perform base maintenance work on CRJ700 and CRJ900 aircraft. The company will handle complete nose-to-tail modifications at two dedicated service lines in the Mirabel facility, helping maintain the fleet’s reliability and ensure continued service for operators and passengers.

How do EPS Estimates Compare for AVAV & LHX?

The Zacks Consensus Estimate for AVAV’s 2025 earnings per share (EPS) is pegged at $3.63, indicating growth of 10.7% from the prior-year quarter. Its consensus estimate for revenues is pinned at $2.01 billion, implying growth of 145.5%. The company’s near-term EPS estimates (except 2026) have improved over the past 60 days.

For LHX, the Zacks Consensus Estimate for 2025 EPS is pegged at $10.52, indicating a year-over-year decline of 19.7%. Its consensus estimate for revenues is pinned at $21.78 billion, showing growth of 2.1%. The company’s 2025 and 2026 EPS estimates have moved north over the past 60 days.

Stock Price Performance: AVAV vs. LHX

AVAV has outperformed LHX over the past year. Shares of AVAV gained 71.4% compared with LHX’s 17.7% growth.

LHX’s Valuation More Attractive Than AVAV

AVAV shares trade at a forward 12-month Price/Sales (P/S F12M) multiple of 8.43X compared with LHX’s P/S F12M of 2.42X, making LHX relatively more attractive from a valuation standpoint.

Conclusion

Both AeroVironment and L3Harris stand to benefit from the rising global defense spending and continued push toward advanced technologies. However, while AeroVironment has demonstrated strong momentum with robust contract wins and international partnerships, L3Harris stands out as the stronger investment choice overall.

With its diversified operations across multiple defense domains, large-scale contracts and more attractive valuation, L3Harris offers greater stability and consistent performance potential. For investors seeking a balanced mix of growth, reliability and long-term value, LHX appears better positioned to capitalize on the ongoing defense boom.

LHX currently carries a Zacks Rank #2 (Buy), while AVAV carries a Zacks Rank #3 (Hold). You can see the full list of today’s Zacks Rank #1 (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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