AeroVironment, Inc. Reported A Surprise Loss, And Analysts Have Updated Their Forecasts

It's been a mediocre week for AeroVironment, Inc. (NASDAQ:AVAV) shareholders, with the stock dropping 12% to US$132 in the week since its latest quarterly results. Revenues missed expectations, with revenue of US$168m falling 19% short of forecasts. Earnings correspondingly dipped, with AeroVironment reporting a statutory loss of US$0.06 per share, where the analysts were expecting a profit. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for AeroVironment

Taking into account the latest results, the most recent consensus for AeroVironment from seven analysts is for revenues of US$954.4m in 2026. If met, it would imply a sizeable 29% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to jump 211% to US$3.66. Before this earnings report, the analysts had been forecasting revenues of US$991.5m and earnings per share (EPS) of US$3.70 in 2026. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.

It will come as no surprise then, that the consensus price target fell 10% to US$204following these changes. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values AeroVironment at US$240 per share, while the most bearish prices it at US$146. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that AeroVironment's rate of growth is expected to accelerate meaningfully, with the forecast 22% annualised revenue growth to the end of 2026 noticeably faster than its historical growth of 18% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.7% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that AeroVironment is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Even so, earnings are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of AeroVironment's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on AeroVironment. Long-term earnings power is much more important than next year's profits. We have forecasts for AeroVironment going out to 2027, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.