By Key Points
Shares of AeroVironment (NASDAQ: AVAV) charged out of the gate on Thursday, soaring as much as 13%. As of 11:18 a.m. ET, the stock was still up 11%.
The catalyst that sent the drone-maker higher was a financial report that wowed investors.
AVAV takes flight
For its fiscal 2027 first quarter (ended Aug. 1), AeroVironment generated record revenue of $480.5 million, up 6% year over year, driven by robust sales in its autonomous systems segment. This drove adjusted diluted earnings per share (EPS) of $0.59, up 84%.
For context, analysts’ consensus estimates called for revenue of $456.1 million and adjusted EPS of $0.25, so AeroVironment surpassed both measures with room to spare.
Revenue from the space, cyber, and directed energy (SCDE) segment fell 21% year over year to $134 million, but the automated systems (AxS) segment more than made up the shortfall, climbing 21% to $346 million.
There were other reasons to celebrate. AeroVironment’s bookings jumped 71% to $683 million, pushing its book-to-bill ratio to 1.4. This suggests demand is currently outpacing supply. The company also reported a record funded backlog that climbed 37% year over year and 23% quarter over quarter to $1.5 billion, while its unfunded backlog — which includes expected, but not obligated, future business — was $1.4 billion.
Investors were pleased that management maintained the company’s full-year outlook, forecasting revenue of roughly $2.175 billion, representing 10% growth, and adjusted diluted EPS of $3.16, a 4% decline, both at the midpoint of its guidance. Management noted that the expected lower profits were the result of planned capacity and facility expansion and higher depreciation expenses — which will support future growth.
The loss of a major contract and accounting issues earlier this year have weighed on AeroVironment, which remains 62% off its late 2025 peak. However, that decline has had a corresponding impact on its valuation.
The stock is currently selling for 48 times forward earnings and 35 times next year’s expected earnings, the lowest multiples in more than a year. This gives astute investors the chance to pick up AeroVironment shares at a rare discount.
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Danny Vena, CPA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AeroVironment. The Motley Fool has a disclosure policy.
