AeroVironment (NASDAQ:AVAV) Shares Down 5.4% - Should You Sell?

Key Points

• AeroVironment shares fell 5.4% to $140.80 on unusually heavy trading volume, amid a broader sell-off in drone and other high-beta stocks. The stock is down roughly 41% year to date.
• Investors are focused on earnings and outlook risks: analysts have cut estimates 11 times in 90 days, and the company reportedly missed expectations in three straight quarters. An early-stage board fiduciary-duty investigation adds further legal and governance pressure.
• The long-term growth case remains supported by a first international LOCUST counter-drone laser order and generally bullish analyst ratings. AeroVironment reported quarterly EPS of $0.59 versus a $0.22 consensus estimate, while analysts maintain a “Moderate Buy” rating and an average price target of $255.47.

AeroVironment, Inc. (NASDAQ:AVAV - Get Free Report)'s stock price dropped 5.4% on Wednesday . The stock traded as low as $139.77 and last traded at $140.80. 4,430,739 shares were traded during mid-day trading, an increase of 175% from the average daily volume of 1,613,943 shares. The stock had previously closed at $148.78.

Trending Headlines about AeroVironment

Here are the key news stories impacting AeroVironment this week:

• Positive Sentiment: AeroVironment reportedly secured its first international order for the LOCUST counter-drone laser system. The deal expands the company’s international customer base and supports the long-term growth case for its directed-energy and counter-UAS products. AeroVironment Nabs First International Order For LOCUST Counter-Drone Laser System
• Neutral Sentiment: Wall Street is focused on tonight’s earnings release, with consensus first-quarter EPS estimated at approximately $0.25, or about 22% below the year-earlier result. Investors will look for revenue growth, order momentum and management’s comments on the full-year outlook. What Wall Street Expects from Earnings Today
• Negative Sentiment: Analysts have reduced their estimates 11 times over the past 90 days, while reports say AeroVironment has missed expectations in three consecutive quarters. This has raised the risk that another disappointment or weaker guidance could further damage investor confidence. Stock Faces Earnings Test Amid Declining Analyst Expectations
• Negative Sentiment: Drone stocks broadly sold off without a clear company-specific catalyst as investors rotated away from riskier, high-beta names. AeroVironment’s roughly 41% year-to-date decline and elevated earnings uncertainty made it particularly vulnerable to the risk-off trading. Drone Stocks Slide as Risk-Off Sentiment Hits High-Beta Names
• Negative Sentiment: Berger Montague announced an investigation into AeroVironment’s board over potential breaches of fiduciary duty. The inquiry is at an early stage, but it adds legal and governance overhang ahead of the earnings report. Berger Montague Board Investigation

Wall Street Analysts Forecast Growth

A number of research firms recently weighed in on AVAV. Canaccord Genuity Group dropped their price target on AeroVironment from $280.00 to $240.00 and set a "buy" rating on the stock in a research note on Friday, July 10th. Needham & Company LLC reaffirmed a "buy" rating and set a $225.00 target price on shares of AeroVironment in a research report on Thursday, July 9th. Wolfe Research lowered shares of AeroVironment to a "buy" rating in a research note on Tuesday, June 30th. Piper Sandler decreased their price target on AeroVironment from $248.00 to $235.00 and set an "overweight" rating for the company in a report on Thursday, July 9th. Finally, Weiss Ratings reiterated a "sell (d)" rating on shares of AeroVironment in a research note on Friday. Two analysts have rated the stock with a Strong Buy rating, nineteen have given a Buy rating, two have issued a Hold rating and one has issued a Sell rating to the company. According to data from MarketBeat.com, AeroVironment currently has an average rating of "Moderate Buy" and an average price target of $255.47.

AeroVironment Stock Down 5.4%

The company has a market cap of $7.16 billion, a PE ratio of -38.26, a P/E/G ratio of 5.00 and a beta of 1.41. The company has a quick ratio of 3.59, a current ratio of 4.30 and a debt-to-equity ratio of 0.17. The stock has a 50-day moving average of $159.81 and a 200-day moving average of $180.82.

AeroVironment (NASDAQ:AVAV - Get Free Report) last posted its quarterly earnings data on Wednesday, September 9th. The aerospace company reported $0.59 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $0.22 by $0.37. AeroVironment had a negative net margin of 9.00% and a positive return on equity of 3.71%. AeroVironment has set its FY 2027 guidance at 3.020-3.340 EPS. Sell-side analysts predict that AeroVironment, Inc. will post 3.2 earnings per share for the current fiscal year.

Insider Buying and Selling

In other AeroVironment news, Director Stephen Page sold 250 shares of AeroVironment stock in a transaction that occurred on Monday, June 15th. The shares were sold at an average price of $174.41, for a total transaction of $43,602.50. Following the transaction, the director directly owned 49,001 shares of the company's stock, valued at approximately $8,546,264.41. This trade represents a 0.51% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CAO Brian Shackley sold 205 shares of the business's stock in a transaction on Friday, August 14th. The stock was sold at an average price of $201.86, for a total transaction of $41,381.30. Following the completion of the sale, the chief accounting officer directly owned 7,888 shares of the company's stock, valued at $1,592,271.68. This represents a 2.53% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold 705 shares of company stock worth $132,979 over the last quarter. Company insiders own 0.79% of the company's stock.

Institutional Trading of AeroVironment

Several large investors have recently modified their holdings of the business. California State Teachers Retirement System increased its stake in shares of AeroVironment by 16,307.2% during the second quarter. California State Teachers Retirement System now owns 6,215,051 shares of the aerospace company's stock valued at $1,025,918,000 after buying an additional 6,177,171 shares during the period. BlackRock Inc. bought a new stake in AeroVironment in the second quarter worth $574,566,000. American Capital Management Inc. purchased a new stake in AeroVironment during the 2nd quarter valued at about $69,745,000. Bank of America Corp DE bought a new stake in shares of AeroVironment during the second quarter valued at approximately $67,549,000. Finally, Norges Bank purchased a new position in AeroVironment in the 4th quarter worth approximately $94,655,000. 86.38% of the stock is owned by institutional investors.

AeroVironment Company Profile

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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