What Happened?
Shares of aerospace and defense company AeroVironment (NASDAQ: AVAV) fell 5.8% in the afternoon session after investors grew cautious ahead of the company's upcoming earnings report, with Wall Street analysts forecasting a significant drop in profitability. Analysts expect the drone manufacturer to post quarterly earnings of $0.34 per share, which would represent a steep 61.8% decline compared to the same period last year. While revenues are projected to increase substantially to around $453.5 million, the focus appears to be on the sharp contraction in earnings.
The shares closed the day at $226.76, down 4.6% from previous close.
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What Is The Market Telling Us
AeroVironment’s shares are very volatile and have had 24 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 9 days ago when the stock gained 3.2% on the news that a wave of positive sentiment from Wall Street analysts, including several recent initiations of coverage with 'Strong Buy' ratings. The bullish outlook is supported by recent actions from multiple investment firms. For instance, Needham initiated coverage on the stock with a 'Strong Buy' rating and a $300 price target. Canaccord Genuity also recently began covering AeroVironment with a 'Strong Buy' rating and a $305 price target. These positive initiations contribute to an overall 'Strong Buy' consensus rating among analysts covering the company, reflecting growing confidence in its prospects.
AeroVironment is up 45.1% since the beginning of the year, but at $227 per share, it is still trading 20.3% below its 52-week high of $284.95 from June 2025. Investors who bought $1,000 worth of AeroVironment’s shares 5 years ago would now be looking at an investment worth $3,158.
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