AeroVironment shares rose 6.5% Tuesday after the company said it remains in active negotiations with the U.S. Space Force regarding a contract amendment for the SCAR program. The defense technology company stated it is working on a firm-fixed-price contract to deliver ground stations for the Satellite Communications Augmentation Resource program. The contract was temporarily paused while both parties align on a commercialized product solution with an expedited delivery timeline.

This news follows a 17% share decline yesterday after Raymond James analyst Brian Gesuale downgraded the stock from Strong Buy to Underperform. Gesuale noted that Space Force announced it is recompeting the SCAR program, which was the company’s largest program at approximately $1.4 billion of value, potentially erasing $1 billion to $1.4 billion from AeroVironment’s $2.8 billion total backlog. Jefferies analyst Greg Konrad maintained a Buy rating, suggesting the sell-off was overdone.