AeroVironment’s Quarterly Results Beat Street Estimates As Sales Pick Up

AeroVironment reported better-than-expected fiscal third-quarter results driven by double-digit year-over-year growth in sales. Shares advanced 3.7% to close at $106.37 on March 9.

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The aircraft company’s 3Q adjusted earnings of $0.14 per share beat the Street estimates of $0.00 per share. Earnings also compared favorably to a loss of $0.01 per share recorded in the prior-year quarter.

AeroVironment’s (AVAV) revenues increased 27% year-over-year to $78.8 million in the quarter and surpassed the consensus estimate of $75.46 million. Gross margin was $28.6 million, up 22%.

AeroVironment CEO Wahid Nawabi commented, “We continue to shape our portfolio with three transformative acquisitions that we are confident will accelerate our success and value creation.”

“We continue to build on our momentum and recently received United States government approval for our first export of Switchblade 300 to an allied nation,” Nawabi added.

For the fiscal year 2021, the company projects revised adjusted EPS to be in the range of $1.74 to $1.94 per share, versus analysts’ expectations of $1.86. Revenue is expected to land between $400 million and $410 million, versus the consensus estimate of $405 million. (See AeroVironment stock analysis on TipRanks)

On March 8, Canaccord Genuity analyst Kenneth Herbert maintained a Buy rating and a price target of $140 (31.6% upside potential) on the stock.

“While the stock is facing broader reflation and defense sentiment headwinds,” the analyst believes “as estimates fully reflect the recent acquisitions, and confidence around defense spending under the Biden Administration increases, AVAV will benefit.”

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating. That’s based on 4 Buys versus 2 Holds. The average analyst price target of $125 implies 17.5% upside potential to current levels. Shares have increased 65% over the past six months.

AeroVironment scores a “Perfect 10” from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.