Shares shifted sharply as AEVEX Corp. surged 12.3% to $23.46 on August 14, erasing the prior session's 8.2% post-earnings sell-off and signaling that investors have warmed to a quarter that paired blowout growth with an ambitious acquisition. The question now: does the math hold up?
Revenue Doubled, but One Program Is Doing the Heavy Lifting
AEVEX posted Q2 revenue of $201.8 million, with net income improving to $6.7 million from a prior-year loss. The headline figure is extraordinary — revenue grew 99.5% year over year, driven by rapid expansion in its tactical-systems unit and the European Command deep-strike program. That single program generated $72.2 million of the quarter's revenue. Investors should note the concentration risk: funded backlog — meaning contracts already paid for — fell to $259.8 million as that deep-strike work converted quickly into revenue. If follow-on orders slow, the growth narrative thins fast.
The BlackSea Deal Adds Scale — and Dilution
AEVEX will pay up to $650 million for BlackSea Technologies: roughly $250 million in cash, $350 million in stock priced at $27.50 per share (about 12.7 million new shares), and a $50 million earn-out. That stock price sits 17% above today's trading level, meaning current shareholders are effectively issuing equity at a premium they haven't yet earned. BlackSea is expected to generate roughly $150 million in 2026 revenue with profit margins comparable to AEVEX's.
The deal is slated to close in September and would push combined revenue toward the $850–$870 million range, vaulting AEVEX into a different weight class among small defense-tech firms.
Raised Guidance Excludes the Acquisition
Management lifted full-year guidance to $700–$720 million in revenue and $105–$111.5 million in adjusted EBITDA — excluding BlackSea. That means the organic business alone is tracking toward roughly 3.5× last year's first-half revenue of $154.4 million. Still, the U.S. government accounted for 86% of first-half revenue , leaving AEVEX exposed to budget shifts or continuing-resolution freezes.
Valuation Still Trails Analyst Targets — for Now
At $23.46, shares trade well below analyst price targets that range from $31 to $45. But with $99.1 million in long-term debt and $215.2 million in cash , the balance sheet can absorb the deal's cash component. The opportunity pipeline expanded to roughly $10.5 billion — a number that will matter only if conversion rates hold. For now, the market is betting they will.