AeroVironment (NASDAQ:AVAV) shares plunged by over 6% in the premarket session today after the maker of Switchblade drones delivered less-than-promising fourth-quarter results. AeroVironment’s stock has been on a weak footing over the past week after its rival drone maker Anduril Industries bagged a $300 million deal to supply UAVs (unmanned aerial vehicles) to Taiwan.
AVAV’s Dismal Q4 Performance
In Q4, AVAV’s top line improved by nearly 6% year-over-year to $197 million. Its EPS, on the other hand, plunged by nearly 57% to $0.43. While the company experienced a 74% growth in its Loitering Munitions Systems segment, these gains were partially offset by declines across its UnCrewed Systems, Unmanned Systems, and MacCready Works segments.
Another sign of concern for investors is a decline in AVAV’s funded backlog, which dropped to $400 million from roughly $424 million a year ago. Still, the company remains optimistic heading into Fiscal year 2025. It anticipates that there will be a 10%-14% increase in its top line for the year. EPS for the year is estimated to be in the range of $3.18 to $3.49.
The current dynamic of increased usage of drones and unmanned weapons systems across the globe has been a key driver of AVAV’s share price, which is up by nearly 113% over the past year. The company’s Switchblade drones had garnered quite a bit of attention as the Russia-Ukraine conflict began nearly two years ago. However, rising market competition could be a threat to AVAV over the coming periods. Anduril’s recent order win is a case in point.
What Is the Price Forecast for AVAV Stock?
Overall, the Street has a Strong Buy consensus rating on AeroVironment, alongside an average AVAV price target of $228.33. However, analysts’ views on the stock could see a revision following its Q4 results.
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