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5 Reasons Why You Should Add AeroVironment to Your Portfolio

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Earnings estimates for AeroVironment, Inc. (AVAV - Free Report) have been revised upward in the past 30 days, reflecting analyst’s optimism in the stock. The Zacks Consensus Estimate for fiscal 2019 and 2020 earnings have moved up 20% and 1.4% to $1.38 and $1.49, respectively.

The company’s expected long-term earnings growth rate is pegged at 20%, higher than the industry average of 10.60%.

Shares of AeroVironment have surged 106.3% in the past year compared with the industry’s rise of 20.7%.

Let’s focus on the factors that make AeroVironment a profitable pick.

Earnings & Surprise History

In first-quarter fiscal 2019, AeroVironment delivered earnings of 59 cents per share, beating the Zacks Consensus Estimate of 6 cents by 883.33%.

The company’s average four-quarter positive earnings surprise is 365.27%.

 Growth Estimate

Year-over-year growth estimate for fiscal 2019 and 2020 sales have moved up 2.86% and for 22.30%, respectively.

Year-over-year growth estimate for fiscal 2019 and 2020 earnings have moved up 27.78% and for 7.37%, respectively.

Increasing Backlog

Solid funded backlog at the end of fiscal year 2018 drove the company’s first-quarter revenues by 127% on a year-over-year basis. Consistent demand reflects strong funded backlog of $157 million as of the end of the first quarter, up 120% year over year. First-quarter ending backlogs of $128 million are expected to be delivered in fiscal 2019. 

Unmanned Technology Solution Provider

The company has divested the Efficient Energy Systems business and gained $8.8 million. It expects to receive additional $6.5 million from this divestiture in the current quarter.Through the divestiture and the formation of the HAPSMobile joint venture, AeroVironment has been transformed into a pure-play, unmanned technology solution provider. It offers a unique combination of advanced technology, reliability, safety and effectiveness to the end markets.

Leader in Small UAS

Within the U.S. Department of Defense market, AeroVironmentcontinues to be the leader in small UAS (Unmanned Aircraft System).In international business, the company has secured its first contract for the adoption of the Puma systems by the German Navy. This indicates the company’s strength in small UAS in the global market.

Zacks Rank & Other Stocks to Consider

AeroVironment sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

A few other top-ranked stocks in the same space are Aerojet Rocketdyne Holdings, Inc , Teledyne Technologies Incorporated (TDY - Free Report) and American Outdoor Brands Corporation .

While Aerojet Rocketdyne Holdings and Teledyne Technologies sport a Zacks Rank #1, American Outdoor Brands carries a Zacks Rank #2 (Buy).

Aerojet Rocketdyne Holdings delivered an average positive earnings surprise of 9.27% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has improved 31% in the past 60 days.

Teledyne Technologies posted an average positive earnings surprise of 17% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has increased 9.3% in the past 60 days.

American Outdoor Brands recorded an average positive earnings surprise of 65.71% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has increased by 24% in the past 60 days.

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