AeroVironment Buys Telerob For $45.5M, Posts 2Q Profit

AeroVironment surprised the Street with better-than-expected earnings and revenues in the second quarter of fiscal 2021. In addition, the defense contractor announced the acquisition of Telerob GmbH, a leading German robotics company, for $45.4 million. AeroVironment stock rose 1.8% in Wednesday’s pre-market session.

AeroVironment’s (AVAV) 2Q earnings of $0.48 per share grew 41.2% year-over-year and came ahead of analysts’ estimates of $0.31 per share. Its revenues increased 11% year-over-year to $92.7 million and surpassed the consensus estimate of $81.8 million.

As for fiscal 2021, the company anticipates revenues in the range of $390 million – $410 million, compared to analysts’ estimates of $404.2 million. The company foresees fiscal 2021 earnings in the range of $1.74 – $1.94 per share, compared to the consensus estimates of $1.88. (See AVAV stock analysis on TipRanks)

Concurrent with the earnings results, the company agreed to acquire Telerob to expand its product offering and customer base. AeroVironment said that it will pay “approximately $45.4 million in cash plus a three-year, milestone-based earn-out of up to $7.3 million and the payoff of $9.4 million in debt at closing.” The deal, which is expected to close by spring 2021, will be accretive to fiscal 2022 earnings.

On Dec. 2, Canaccord Genuity analyst Kenneth Herbert raised the stock’s price target to $98 (8.4% upside potential) from $88 and maintained a Buy rating. The analyst said, “While we believe COVID-related delays could continue to impact some operations, such as international deliveries, we expect visibility on the full year FY21 results will remain strong, but the company may not raise guidance out of conservatism.”

Meanwhile, the Street has a bullish outlook on the stock with a Strong Buy analyst consensus. The average price target stands at $94 and implies upside potential of about 3.9% to current levels. Shares have gained 46.5% year-to-date.