In this article, we will look at the 10 Undervalued Aerospace Stocks to Buy Now.
On June 27, Jonathan Siegmann, managing director at Stifel covering aerospace and defense, appeared on a CNBC interview to talk about his key insights about the sector. He emphasized that investors should move away from the old legacy defense playbook. According to Siegmann, the defense sector is entering a new growth phase driven by fundamental change.
He noted that, rather than relying on traditional, large-scale, and costly programs, the industry is shifting towards new technologies and more efficient products. Siegmann highlighted that his team initiated coverage on 11 stocks across three segments, focusing on companies investing heavily in innovation and cheaper, more effective defense solutions.
In addition, Siegmann pointed to AI, autonomy, and drones as the core technologies reshaping the sector. He noted that companies investing in leadership of drone technologies have shown impressive growth figures.
Siegmann also discussed the mix between legacy expensive programs and new low-cost technologies. He used Ukraine’s drone attacks as an example of effective low-cost warfare, contrasting them with high-tech US systems used in precision strikes like Midnight Thunder Hammer. He noted some budget cuts in traditional programs, like the F-35, but expects more bipartisan support for drones and next-generation defense tech in the 2026 fiscal budget.
With that, let’s take a look at the 10 undervalued aerospace stocks to buy now.
Our Methodology
To curate the list of 10 undervalued aerospace stocks to buy now, we used the Finviz Stock Screener, Seeking Alpha, and Insider Monkey’s Q2 2025 hedge funds database. Using the screener, we aggregated a list of aerospace and defense stocks with a forward P/E less than the S&P 500 P/E ratio, which is 25.10 as per the Wall Street Journal. Next, we cross-checked the P/E ratios from Seeking Alpha and ranked the stocks in ascending order of the number of hedge fund holders. Please note that the data was recorded on September 17.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10 Undervalued Aerospace Stocks to Buy Now
10. Coda Octopus Group, Inc. (NASDAQ:CODA)
Forward P/E Ratio: 24.29
Number of Hedge Fund Holders: 3
Coda Octopus Group, Inc. (NASDAQ:CODA) is one of the Undervalued Aerospace Stocks to Buy Now. On September 15, Coda Octopus Group, Inc. (NASDAQ:CODA) released results for its fiscal third quarter of 2025. The company delivered $7.06 million in revenue, representing a 29% year-over-year increase and surpassing expectations by $300,800. Moreover, the EPS of $0.11 also topped estimates by $0.02.
Management noted that the growth was mainly driven by its Marine Technology Business. The segment grew 30.7% year-over-year to reach $4 million. Additionally, the newly acquired Acoustics Sensors and Materials Business contributed $1.5 million.
The company also noted advancing its DAVD technology, with $1.5 million in sales this quarter. It is expected to reach $3.5 to $4 million during the year, up significantly from $1.2 million last year. During the quarter, Coda Octopus Group, Inc. (NASDAQ:CODA) completed the DUS Hardening Program funded by the US and a foreign navy, enabling delivery of 16 redesigned untethered DAVD systems to the US Navy for special forces.
Coda Octopus Group, Inc. (NASDAQ:CODA) supplies underwater and subsea technology solutions. Its marine technology division offers real-time 3D to 6D imaging sonars and Diver Augmented Vision Display (DAVD) systems.
9. Innovative Solutions and Support, Inc. (NASDAQ:ISSC)
Forward P/E Ratio: 17.97
Number of Hedge Fund Holders: 10
Innovative Solutions and Support, Inc. (NASDAQ:ISSC) is one of the Undervalued Aerospace Stocks to Buy Now. Innovative Solutions and Support, Inc. (NASDAQ:ISSC) released its fiscal third quarter results on August 14, and the stock has declined more than 41.5% since the announcement.
The company reported a revenue of $24.1 million, which grew 105% year-over-year and was ahead of Wall Street’s target by $4.94 million. The EPS of $0.14 fell short of the consensus by $0.02. Management noted that this was due to the higher costs on the F-16 product line as Honeywell incurred extra expenses to build safety stock before fully transferring production to the company’s new Exton facility. Management noted that once the transition is complete, Innovative Solutions and Support, Inc. (NASDAQ:ISSC) expects improved efficiencies and better margins in fiscal 2026.
The company has finished construction of its Exton facility and expects to complete the interior setup by early fall. This expansion is expected to increase manufacturing capacity and support integration of the new F-16 product line.
Regardless of a 41.5% decrease in share price, Wall Street remains bullish on the stock as analysts’ 12-month price target of $15.55 reflects a 35.22% upside from current levels.
Innovative Solutions and Support, Inc. (NASDAQ:ISSC) designs and manufactures advanced avionic systems for commercial, business, and military aircraft.
8. AAR Corp. (NYSE:AIR)
Forward P/E Ratio: 16.74
Number of Hedge Fund Holders: 23
AAR Corp. (NYSE:AIR) is one of the Undervalued Aerospace Stocks to Buy Now. On September 16, Airinmar, a subsidiary of AAR Corp. (NYSE:AIR), announced signing a multiyear support services extension with Philippines-based low-cost carrier Cebu Pacific.
The deal, which started in 2022, will continue, and Airinmar will provide component repair cycle management and aircraft warranty management. These services will help Cebu Pacific maximize warranty recoveries and reduce maintenance and repair costs.
Cebu Pacific’s Vice President for Engineering, Shevantha Weerasekera, highlighted that Airinmar’s tailored solutions have helped manage maintenance costs as the airline grows its fleet. The airline now operates 100 aircraft and has over 100 more on order.
AAR Corp. (NYSE:AIR) provides aerospace and defense aftermarket solutions worldwide. It sells aircraft parts, offers maintenance and repair services, and manages fleet operations.
7. V2X, Inc. (NYSE:VVX)
Forward P/E Ratio: 11.08
Number of Hedge Fund Holders: 27
V2X, Inc. (NYSE:VVX) is one of the Undervalued Aerospace Stocks to Buy Now. Wall Street is bullish on V2X, Inc. (NYSE:VVX) since the company released its fiscal second-quarter results for 2025. This is because the company topped revenue and EPS estimates for the quarter and also raised the full-year guidance. The stock price has surged more than 17.9% since the release, indicating an encouraging market reaction.
V2X, Inc. (NYSE:VVX) delivered $1.08 billion in revenue, up only 0.57% year-over-year but ahead of consensus by $19.72 million. The EPS of $1.33 also topped the estimates by $0.29. Management raised the EPS guidance from the prior range of $4.45 – $4.85 to $4.65 – $4.95.
Several analysts have expressed their bullish sentiment. Earlier on August 13, Mariana Perez from Bank of America Securities upgraded the stock to a Buy, while also raising the price target from $55 to $65. More recently, Joe Gomes from Noble Financial reiterated a Buy rating on V2X, Inc. (NYSE:VVX) with a price target of $72.
V2X, Inc. (NYSE:VVX) provides integrated mission solutions and services primarily for defense and national security clients worldwide.
6. Textron Inc. (NYSE:TXT)
Forward P/E Ratio: 13.44
Number of Hedge Fund Holders: 29
Textron Inc. (NYSE:TXT) is one of the Undervalued Aerospace Stocks to Buy Now. On September 16, Textron Inc. (NYSE:TXT) launched a nationwide tour to showcase the Beechcraft M-346N as a solution for the US Navy’s Undergraduate Jet Training System program.
The M-346N is based on Leonardo’s original M-346, which trains pilots globally for advanced 4th and 5th-generation air forces. Textron Inc. (NYSE:TXT) and Leonardo have teamed up to meet the Navy’s jet trainer needs.
The jet offers a full training ecosystem with advanced features. This includes AI-powered instruction, high-fidelity simulators, and a Live-Virtual-Constructive system linking aircraft, simulators, and computer-generated forces. It also has a Precision Landing Mode for carrier operation training.
Textron Inc. (NYSE:TXT) is a diversified multi-industry company providing solutions and services through its segments, including aviation, defense, industrial products, and finance.
5. Moog Inc. (NYSE:MOG.A)
Forward P/E Ratio: 24.12
Number of Hedge Fund Holders: 31
Moog Inc. (NYSE:MOG.A) is one of the Undervalued Aerospace Stocks to Buy Now. Wall Street is Bullish on Moog Inc. (NYSE:MOG.A) since the company topped revenue and EPS estimates for its fiscal third quarter of 2025.
The company posted a revenue of $971.36 million, up 7.36% year-over-year and ahead of consensus by $49.61 million. The EPS of $2.37 also topped estimates by $0.22. Management noted the revenue of $971 million was a record, driven by growth in Commercial Aircraft, Space and Defense, and Military Aircraft segments. Notably, the 12-month backlog reached a record high of $2.7 billion, driven by Military Aircraft and Space and Defense.
Several analysts have expressed their bullish sentiment. Earlier on July 27, Gautam Khanna from TD Cowen reiterated a Buy rating on Moog Inc. (NYSE:MOG.A) with a price target of 205. More recently, Kristine Liwag from Morgan Stanley raised the price target on the stock from $205 to $215, while keeping a Hold rating.
Moog Inc. (NYSE:MOG.A) designs and manufactures high-precision motion and fluid control systems for military and commercial aircraft, satellites, space vehicles, and defense systems.
4. Huntington Ingalls Industries, Inc. (NYSE:HII)
Forward P/E Ratio: 18.37
Number of Hedge Fund Holders: 36
Huntington Ingalls Industries, Inc. (NYSE:HII) is one of the Undervalued Aerospace Stocks to Buy Now. On September 11, Huntington Ingalls Industries, Inc. (NYSE:HII) announced that it is expanding its shipbuilding capacity by partnering with shipyards and fabricators across several states.
This strategic move aims to meet the growing demand for ships from the US Navy. Management noted that by spreading work to more companies in different locations, the company aims to improve its overall production speed and schedule reliability.
Huntington Ingalls Industries, Inc. (NYSE:HII) has already doubled its outsourced work hours in 2025 and plans to quadruple them within two years. Moreover, hiring has also increased, whereas employee attrition has decreased, and expertise is building up.
Huntington Ingalls Industries, Inc. (NYSE:HII) builds and services defense ships for the US Navy and Coast Guard. It constructs non-nuclear ships, nuclear-powered aircraft carriers, and submarines.
3. Northrop Grumman Corporation (NYSE:NOC)
Forward P/E Ratio: 22.61
Number of Hedge Fund Holders: 42
Northrop Grumman Corporation (NYSE:NOC) is one of the Undervalued Aerospace Stocks to Buy Now. On September 18, Northrop Grumman Corporation (NYSE:NOC) announced signing a Memorandum of Understanding (MoU) with Taiwan’s National Chung-Shan Institute of Science and Technology (NCSIST).
The agreement aims to explore cooperation on modernizing air and missile defense systems for Taiwan’s Ministry of National Defense. NCSIST is a leading research center for national defense technology. It works on developing, manufacturing, and selling defense solutions to boost Taiwan’s self-reliant defense capabilities. The research center with Northrop Grumman Corporation (NYSE:NOC)’s expertise aims to enhance Taiwan’s defense readiness, with a goal to better equip Taiwan to face evolving aerospace and missile threats.
Northrop Grumman Corporation (NYSE:NOC) is a global aerospace and defense company. It designs and builds military aircraft, missile defense systems, and space technologies.
2. General Dynamics Corporation (NYSE:GD)
Forward P/E Ratio: 21.6
Number of Hedge Fund Holders: 61
General Dynamics Corporation (NYSE:GD) is one of the Undervalued Aerospace Stocks to Buy Now. On September 19, General Dynamics Corporation (NYSE:GD) announced expanding its partnership with Daimler Truck Holding AG to grow in the military vehicle market.
The deal focuses on Daimler’s Mercedes-Benz Special Trucks unit. The unit makes Zetros and Unimog off-road trucks, used by NATO and other global militaries. As part of the collaboration, the companies will offer full logistics vehicle solutions with long-term service. The target market includes Europe and North America, among others.
Franziska Cusumano, CEO of Mercedes-Benz Special Trucks, noted that the defense spending is increasing worldwide and governments are replacing old vehicles with the latest versions and are also signing long-term support agreements. He noted that the company aims to provide armies with tailored trucks and lasting support and believes that General Dynamics Corporation (NYSE:GD) will help expand its reach.
General Dynamics Corporation (NYSE:GD) is a global aerospace and defense company providing business jets, military ships, combat vehicles, weapons, and technology services.
1. Lockheed Martin Corporation (NYSE:LMT)
Forward P/E Ratio: 21.6
Number of Hedge Fund Holders: 73
Lockheed Martin Corporation (NYSE:LMT) is one of the Undervalued Aerospace Stocks to Buy Now. On September 16, Lockheed Martin Corporation (NYSE:LMT) announced an upgrade to South Korea’s F-16 Block 52 flight simulators. The upgrade is based on the advanced capabilities of the upgraded F-16 Viper aircraft.
Management noted that the contract spans six years; in this time, the company will upgrade nine simulators at Seosan and Chungju Air Bases. The simulators will be upgraded to match the F-16V configuration, and the company will also continue contractor logistics support.
Todd Morar, Lockheed Martin’s VP of Air and Commercial Solutions, highlighted the importance of accuracy in ground-based training. He also noted that the update includes advanced avionics, an Active Electronically Scanned Array radar, a modern cockpit, and new weapons systems.
Lockheed Martin Corporation (NYSE:LMT) is a global aerospace and defense company. It designs and builds advanced military aircraft, missile systems, helicopters, and space technology.
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