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AeroVironment (AVAV) Dips More Than Broader Markets: What You Should Know

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AeroVironment (AVAV - Free Report) closed the most recent trading day at $92.84, moving -0.48% from the previous trading session. This change lagged the S&P 500's 0.04% loss on the day. Meanwhile, the Dow gained 0.26%, and the Nasdaq, a tech-heavy index, lost 0.48%.

Coming into today, shares of the maker of unmanned aircrafts had lost 13.81% in the past month. In that same time, the Aerospace sector lost 4.71%, while the S&P 500 lost 4.53%.

Investors will be hoping for strength from AVAV as it approaches its next earnings release, which is expected to be December 4, 2018. The company is expected to report EPS of $0.16, down 44.83% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $74.83 million, up 1.35% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.36 per share and revenue of $307.72 million. These totals would mark changes of +25.93% and +2.95%, respectively, from last year.

Any recent changes to analyst estimates for AVAV should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. AVAV is holding a Zacks Rank of #1 (Strong Buy) right now.

In terms of valuation, AVAV is currently trading at a Forward P/E ratio of 68.85. This valuation marks a premium compared to its industry's average Forward P/E of 20.26.

It is also worth noting that AVAV currently has a PEG ratio of 3.44. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. AVAV's industry had an average PEG ratio of 2.25 as of yesterday's close.

The Aerospace - Defense Equipment industry is part of the Aerospace sector. This industry currently has a Zacks Industry Rank of 54, which puts it in the top 21% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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