AeroVironment (NASDAQ:AVAV) Shares Gap Down on Disappointing Earnings

Key Points

• Q3 miss and guidance cut: AeroVironment reported adjusted EPS of $0.64 vs. $0.72 expected and revenue of $408M vs. $488M expected, prompting a premarket gap down and a cut to FY‑2026 adjusted EPS guidance to $2.75–$3.10 (from $3.40–$3.55).
• Near‑term risk drivers: Management cited delayed government orders and there is reported uncertainty around a ~ $1.7B Space Force SCAR award, while a Pomerantz law‑firm investigation adds additional headline and litigation risk.
• Analyst stance and insider activity: Many analysts kept buy/overweight ratings despite trimming price targets (consensus target ~$334), while insiders have recently sold shares and short‑term selling pressured the stock.

AeroVironment, Inc. (NASDAQ:AVAV - Get Free Report) gapped down prior to trading on Wednesday following a dissappointing earnings announcement. The stock had previously closed at $221.57, but opened at $204.50. AeroVironment shares last traded at $206.89, with a volume of 1,720,720 shares changing hands.

The aerospace company reported $0.64 earnings per share for the quarter, missing the consensus estimate of $0.72 by ($0.08). The firm had revenue of $408.05 million for the quarter, compared to analyst estimates of $487.94 million. AeroVironment had a positive return on equity of 3.42% and a negative net margin of 5.08%.The firm's revenue for the quarter was up 143.4% on a year-over-year basis. During the same quarter in the prior year, the firm earned $0.30 earnings per share. AeroVironment has set its FY 2026 guidance at 2.750-3.100 EPS.

Key Headlines Impacting AeroVironment

Here are the key news stories impacting AeroVironment this week:

• Positive Sentiment: Analysts still bullish despite trimming targets — several firms lowered price targets but kept buy/overweight ratings, signaling continued confidence in AVAV’s longer‑term market position. (KeyCorp cut its PT to $295 but remains overweight; Needham, Citizens and Baird also trimmed PTs while keeping positive ratings.) Analyst Price Target Changes
• Positive Sentiment: Long-term market tailwinds remain: defense demand, counter‑drone needs and AI-enabled drone growth support a multiyear addressable market that analysts cite as a structural upside for AVAV. Counter-Drone Capabilities and Market Outlook
• Neutral Sentiment: Company materials available — full Q3 slide deck, press release and earnings call transcript were released for investors to dig into the details and management commentary on timing and contract issues. Q3 Slide Deck / Press Release
• Negative Sentiment: Q3 results missed expectations: revenue of ~$408M vs. ~\$488M expected and adjusted EPS of $0.64 vs. ~$0.72 expected; management cut FY‑2026 adjusted EPS guidance to $2.75–$3.10 (from $3.40–$3.55) and lowered revenue midpoint, driving the immediate sell‑off. Q3 Results & Guidance Cut
• Negative Sentiment: Contract uncertainty: reports flagged potential termination/uncertainty around a ~\$1.7B Space Force SCAR award — that risk increases revenue volatility and investor concern about near‑term backlog. SCAR Contract Uncertainty
• Negative Sentiment: Timing delays & government order disruptions: management cited delayed government orders (including impacts from a government shutdown period) as drivers of weaker-than-expected quarterly timing. Timing Issues / Government Order Delays
• Negative Sentiment: Legal/investor scrutiny: a Pomerantz law‑firm investigation was announced, which can add near‑term headline risk and potential litigation uncertainty for shareholders. Pomerantz Investigation

Analysts Set New Price Targets

A number of research analysts recently weighed in on AVAV shares. Jefferies Financial Group reissued a "buy" rating and set a $390.00 target price on shares of AeroVironment in a report on Monday, March 2nd. Citizens Jmp reduced their price objective on shares of AeroVironment from $400.00 to $350.00 and set a "market outperform" rating for the company in a research report on Wednesday. Raymond James Financial reissued an "underperform" rating on shares of AeroVironment in a research report on Monday, March 2nd. JPMorgan Chase & Co. assumed coverage on shares of AeroVironment in a research note on Tuesday, February 17th. They set an "overweight" rating and a $320.00 target price for the company. Finally, The Goldman Sachs Group reduced their target price on shares of AeroVironment from $486.00 to $429.00 and set a "buy" rating for the company in a report on Friday, December 12th. One equities research analyst has rated the stock with a Strong Buy rating, eighteen have given a Buy rating, one has issued a Hold rating and three have given a Sell rating to the company's stock. Based on data from MarketBeat, AeroVironment currently has an average rating of "Moderate Buy" and a consensus target price of $334.00.

Insiders Place Their Bets

In related news, CAO Brian Charles Shackley sold 200 shares of the firm's stock in a transaction dated Tuesday, December 30th. The shares were sold at an average price of $250.92, for a total transaction of $50,184.00. Following the transaction, the chief accounting officer directly owned 5,994 shares of the company's stock, valued at approximately $1,504,014.48. This trade represents a 3.23% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. Also, CFO Kevin Patrick Mcdonnell sold 999 shares of AeroVironment stock in a transaction dated Monday, January 12th. The stock was sold at an average price of $367.60, for a total transaction of $367,232.40. Following the completion of the sale, the chief financial officer owned 17,301 shares of the company's stock, valued at $6,359,847.60. This trade represents a 5.46% decrease in their position. The SEC filing for this sale provides additional information. Insiders have sold 4,078 shares of company stock worth $1,301,482 in the last 90 days. Company insiders own 0.81% of the company's stock.

Institutional Inflows and Outflows

Hedge funds have recently made changes to their positions in the business. N.E.W. Advisory Services LLC grew its position in AeroVironment by 60.0% during the third quarter. N.E.W. Advisory Services LLC now owns 80 shares of the aerospace company's stock worth $25,000 after buying an additional 30 shares in the last quarter. AlphaQuest LLC bought a new position in AeroVironment during the 3rd quarter worth $25,000. Tema Etfs LLC acquired a new position in AeroVironment in the 4th quarter valued at $26,000. Hilton Head Capital Partners LLC bought a new stake in shares of AeroVironment during the 4th quarter valued at $26,000. Finally, TD Waterhouse Canada Inc. grew its holdings in shares of AeroVironment by 100.0% during the 3rd quarter. TD Waterhouse Canada Inc. now owns 80 shares of the aerospace company's stock worth $28,000 after purchasing an additional 40 shares in the last quarter. 86.38% of the stock is owned by institutional investors.

AeroVironment Trading Down 4.1%

The company has a market capitalization of $10.61 billion, a price-to-earnings ratio of -169.64, a price-to-earnings-growth ratio of 3.60 and a beta of 1.26. The firm has a fifty day moving average price of $283.26 and a 200-day moving average price of $293.28. The company has a debt-to-equity ratio of 0.16, a quick ratio of 4.29 and a current ratio of 5.08.

About AeroVironment

AeroVironment, Inc NASDAQ: AVAV is a technology company specializing in unmanned aerial systems (UAS), tactical missiles and precision loitering munitions, electric vehicle charging and scalable energy systems. Headquartered in Monrovia, California, the company develops solutions for defense, public safety and commercial markets. Their offerings include small UAS for intelligence, surveillance and reconnaissance, as well as advanced weapons systems designed to meet the needs of modern military operations.

The company's unmanned aerial systems portfolio features platforms such as the Raven, Puma and Switchblade series, which are deployed by the U.S.

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