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AVAV Outperforms Industry in the Past Month: How to Play the Stock?
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Key Takeaways
AVAV shares jumped 55.1% in a month, far outpacing aerospace peers and the broader market.
Zacks Consensus Estimates project strong YoY sales growth and rising earnings in fiscal 2026 and 2027.
AVAV trades at a premium valuation, while labor and supply-chain challenges remain near-term risks.
AeroVironment, Inc. (AVAV - Free Report) stock has gained 55.1% in the past month, outpacing both the Zacks Aerospace-Defense Equipment industry’s growth of 18.9% and the broader Zacks Aerospace sector’s gain of 7.6%. It also came above the Zacks S&P 500 Composite’s return of 2.4% in the same time frame.
Image Source: Zacks Investment Research
Other industry players, such as Rocket Lab USA, Inc. (RKLB - Free Report) and Astronics Corporation (ATRO - Free Report) , have also delivered a similar stellar performance in the past month. Shares of RKLB and ATRO have risen 53.1% and 26.4%, respectively, in the said period.
With AVAV posting recent price gains, some investors may feel tempted to buy the stock quickly. However, it is important to assess whether the company’s fundamentals support sustainable long-term growth or if the recent rise is mainly short-lived. Evaluating AVAV’s growth outlook and potential risks can help investors make a more informed decision.
Tailwinds for AVAV
AVAV’s share gains over the past month seem to be supported by its strong quarterly revenues, strategic partnership and some notable contract wins, which together contributed to its investors’ optimism. The company reported its fiscal second-quarter 2026 results in early December, delivering strong revenue growth of 151%, which led to a notable 41% improvement in gross profit margin.
In the same month, AVAV collaborated with PteroDynamics on a joint technology demonstration, showcasing the integration of its electronic warfare sensors on an autonomous vertical takeoff and landing (VTOL) unmanned aircraft system during a U.S. Navy-hosted exercise.
Moreover, AVAV successfully delivered two Joint Light Tactical Vehicle-mounted mobile counter-unmanned aircraft system (C-UAS) laser weapon systems to the U.S. Army as part of its high-energy laser prototyping program. The delivery highlights the Army’s growing focus on directed-energy solutions to counter emerging aerial threats and underscores AVAV’s role in advancing next-generation defense technologies.
Estimates for AVAV’s Sales & Earnings
The Zacks Consensus Estimate for AVAV’s fiscal 2026 sales implies year-over-year growth of 143.5%, while estimates for fiscal 2027 sales indicate an improvement of 17.1%.
Image Source: Zacks Investment Research
The consensus estimate for its fiscal 2026 and 2027 earnings calls for a year-over-year improvement of 5.8% and 28%, respectively.
Image Source: Zacks Investment Research
Valuation
In terms of valuation, AVAV’s forward 12-month price-to-earnings (P/E) is 87.81X, a premium to the industry average of 51.53X. This suggests that investors will be paying a higher price than the company's expected earnings growth compared with its industry average.
Image Source: Zacks Investment Research
Risks to Consider Before Choosing AVAV
AeroVironment faces some industry-specific challenges that could affect its operations. Labor shortages may slow production, delay contract deliveries and make it harder for the company to deliver products in time.
Supply-chain issues are another concern, as limited access to certain components can also disrupt manufacturing, increase costs and affect the timely delivery of systems. Its industry peers, Rocket Lab and Astronics, also face similar production and supply constraints.
Liquidity Position of AVAV
AVAV has a current ratio of 5.08. The ratio, being more than one, indicates that AVAV possesses sufficient capital to pay off its short-term debt obligations.
Image Source: Zacks Investment Research
Its industry peers, Rocket Lab and Astronics, also maintain current ratios above one. RKLB has a current ratio of 3.18, while ATRO holds 2.87.
Wrapping Up
Considering AeroVironment’s premium valuation compared with its industry, investors interested in this stock should wait for a better entry point. However, given the company’s strong growth potential and strong liquidity position, current shareholders may consider holding the stock.
Image: Bigstock
AVAV Outperforms Industry in the Past Month: How to Play the Stock?
Key Takeaways
AeroVironment, Inc. (AVAV - Free Report) stock has gained 55.1% in the past month, outpacing both the Zacks Aerospace-Defense Equipment industry’s growth of 18.9% and the broader Zacks Aerospace sector’s gain of 7.6%. It also came above the Zacks S&P 500 Composite’s return of 2.4% in the same time frame.
Image Source: Zacks Investment Research
Other industry players, such as Rocket Lab USA, Inc. (RKLB - Free Report) and Astronics Corporation (ATRO - Free Report) , have also delivered a similar stellar performance in the past month. Shares of RKLB and ATRO have risen 53.1% and 26.4%, respectively, in the said period.
With AVAV posting recent price gains, some investors may feel tempted to buy the stock quickly. However, it is important to assess whether the company’s fundamentals support sustainable long-term growth or if the recent rise is mainly short-lived. Evaluating AVAV’s growth outlook and potential risks can help investors make a more informed decision.
Tailwinds for AVAV
AVAV’s share gains over the past month seem to be supported by its strong quarterly revenues, strategic partnership and some notable contract wins, which together contributed to its investors’ optimism. The company reported its fiscal second-quarter 2026 results in early December, delivering strong revenue growth of 151%, which led to a notable 41% improvement in gross profit margin.
In the same month, AVAV collaborated with PteroDynamics on a joint technology demonstration, showcasing the integration of its electronic warfare sensors on an autonomous vertical takeoff and landing (VTOL) unmanned aircraft system during a U.S. Navy-hosted exercise.
Moreover, AVAV successfully delivered two Joint Light Tactical Vehicle-mounted mobile counter-unmanned aircraft system (C-UAS) laser weapon systems to the U.S. Army as part of its high-energy laser prototyping program. The delivery highlights the Army’s growing focus on directed-energy solutions to counter emerging aerial threats and underscores AVAV’s role in advancing next-generation defense technologies.
Estimates for AVAV’s Sales & Earnings
The Zacks Consensus Estimate for AVAV’s fiscal 2026 sales implies year-over-year growth of 143.5%, while estimates for fiscal 2027 sales indicate an improvement of 17.1%.
Image Source: Zacks Investment Research
The consensus estimate for its fiscal 2026 and 2027 earnings calls for a year-over-year improvement of 5.8% and 28%, respectively.
Image Source: Zacks Investment Research
Valuation
In terms of valuation, AVAV’s forward 12-month price-to-earnings (P/E) is 87.81X, a premium to the industry average of 51.53X. This suggests that investors will be paying a higher price than the company's expected earnings growth compared with its industry average.
Image Source: Zacks Investment Research
Risks to Consider Before Choosing AVAV
AeroVironment faces some industry-specific challenges that could affect its operations. Labor shortages may slow production, delay contract deliveries and make it harder for the company to deliver products in time.
Supply-chain issues are another concern, as limited access to certain components can also disrupt manufacturing, increase costs and affect the timely delivery of systems. Its industry peers, Rocket Lab and Astronics, also face similar production and supply constraints.
Liquidity Position of AVAV
AVAV has a current ratio of 5.08. The ratio, being more than one, indicates that AVAV possesses sufficient capital to pay off its short-term debt obligations.
Image Source: Zacks Investment Research
Its industry peers, Rocket Lab and Astronics, also maintain current ratios above one. RKLB has a current ratio of 3.18, while ATRO holds 2.87.
Wrapping Up
Considering AeroVironment’s premium valuation compared with its industry, investors interested in this stock should wait for a better entry point. However, given the company’s strong growth potential and strong liquidity position, current shareholders may consider holding the stock.
AVAV currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.