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Reasons to Add AeroVironment (AVAV) to Your Portfolio Now
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AeroVironment Inc. (AVAV - Free Report) , with its multi-domain robotic solutions, is well-positioned to benefit from the rising demand. The company’s strong international presence, expanding product line and increasing demand due to global tensions make it a strong candidate for investment in the defense space.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment.
Growth Projections
The Zacks Consensus Estimate for AVAV’s 2023 earnings per share is pegged at $2.79. The bottom-line estimates have moved up 13% in the past 60 days.
The Zacks Consensus Estimate for current year sales stands at $666.15 million, indicating year-over-year growth of 23.2%.
Debt Position
AeroVironment’s total debt to capital was 18.6% as of Apr 30, 2023, improving from 21.16% in the prior quarter. It is better than the industry’s average of 27.44%. Such favorable figures indicate that it will be able to meet its debt obligations.
AVAV has a current ratio of 3.93, much better than the industry’s average of 1.15. This implies that the company has sufficient financial capability to pay its short-term debt obligations.
Increasing Demand and Systematic Investments
According to the CEO, the war in Ukraine has become an “inflection point” for the firm. The company has sent hundreds of switchblade suicide drones and the Puma surveillance Unmanned Aircraft Systems (UAS) to Ukraine. It has also received the U.S. government’s permission to sell the Switchblade to 20 U.S. partners and allies.
Revenues for the fiscal year ended Apr 30, 2023, were $540.5 million compared with $445.7 million for the fiscal year ended Apr 30, 2022, representing an increase of 21%. The increase in product revenues was due to a rise in UAS and Tactile Missile Systems.
Total investments for the fiscal year ended Apr 30, 2023, were $23.6 million compared with $15.4 million in the previous fiscal year. R&D expense for the current fiscal year was $64.3 million, or 12% of revenues compared with $54.7 million in the last fiscal year. This increase was primarily due to a rise in development activities regarding enhanced capabilities for the products, development of new product lines and providing support to acquired businesses.
Price Performance
In the past year, AVAV’s shares have rallied 21.8% compared with the industry’s average growth of 12.2%.
The Zacks Consensus Estimate for TDG’s 2023 EPS is pegged at $24.03, implying a year-over-year improvement of 40.2%. It delivered an average earnings surprise of 9% in the past four quarters.
The Zacks Consensus Estimate for VTSI’s 2023 EPS is pegged at 45 cents, implying a year-over-year improvement of 150%. The Zacks Consensus Estimate for 2023 sales indicates year-over-year growth of 16.1%.
The Zacks Consensus Estimate for CW’s 2023 EPS is pegged at $8.82, implying a year-over-year improvement of 8.5%. It delivered an average earnings surprise of 4% in the past four quarters.
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Reasons to Add AeroVironment (AVAV) to Your Portfolio Now
AeroVironment Inc. (AVAV - Free Report) , with its multi-domain robotic solutions, is well-positioned to benefit from the rising demand. The company’s strong international presence, expanding product line and increasing demand due to global tensions make it a strong candidate for investment in the defense space.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment.
Growth Projections
The Zacks Consensus Estimate for AVAV’s 2023 earnings per share is pegged at $2.79. The bottom-line estimates have moved up 13% in the past 60 days.
The Zacks Consensus Estimate for current year sales stands at $666.15 million, indicating year-over-year growth of 23.2%.
Debt Position
AeroVironment’s total debt to capital was 18.6% as of Apr 30, 2023, improving from 21.16% in the prior quarter. It is better than the industry’s average of 27.44%. Such favorable figures indicate that it will be able to meet its debt obligations.
AVAV has a current ratio of 3.93, much better than the industry’s average of 1.15. This implies that the company has sufficient financial capability to pay its short-term debt obligations.
Increasing Demand and Systematic Investments
According to the CEO, the war in Ukraine has become an “inflection point” for the firm. The company has sent hundreds of switchblade suicide drones and the Puma surveillance Unmanned Aircraft Systems (UAS) to Ukraine. It has also received the U.S. government’s permission to sell the Switchblade to 20 U.S. partners and allies.
Revenues for the fiscal year ended Apr 30, 2023, were $540.5 million compared with $445.7 million for the fiscal year ended Apr 30, 2022, representing an increase of 21%. The increase in product revenues was due to a rise in UAS and Tactile Missile Systems.
Total investments for the fiscal year ended Apr 30, 2023, were $23.6 million compared with $15.4 million in the previous fiscal year. R&D expense for the current fiscal year was $64.3 million, or 12% of revenues compared with $54.7 million in the last fiscal year. This increase was primarily due to a rise in development activities regarding enhanced capabilities for the products, development of new product lines and providing support to acquired businesses.
Price Performance
In the past year, AVAV’s shares have rallied 21.8% compared with the industry’s average growth of 12.2%.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks in the same sector are TransDigm Group Inc. (TDG - Free Report) , VirTra Inc. (VTSI - Free Report) and CurtissWright Corp. (CW - Free Report) . TransDigm and VirTra sport a Zacks Rank #1 (Strong Buy), while CurtissWright carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for TDG’s 2023 EPS is pegged at $24.03, implying a year-over-year improvement of 40.2%. It delivered an average earnings surprise of 9% in the past four quarters.
The Zacks Consensus Estimate for VTSI’s 2023 EPS is pegged at 45 cents, implying a year-over-year improvement of 150%. The Zacks Consensus Estimate for 2023 sales indicates year-over-year growth of 16.1%.
The Zacks Consensus Estimate for CW’s 2023 EPS is pegged at $8.82, implying a year-over-year improvement of 8.5%. It delivered an average earnings surprise of 4% in the past four quarters.