AeroVironment (AVAV) Fourth Quarter Earnings and Revenue Lag Estimates

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AeroVironment (AVAV) exited with quarterly earnings of $0.30 per share, missing Zacks consensus estimate of $0.41 per share. That compares to earnings of $1.04 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents a profit surprise of -26.83%. A quarter ago, this unmanned aircraft maker was expected to post a profit of $0.36 per share when it was actually making a profit of $0.32, a surprise of – 11.11%.

In the past four quarters, the company has exceeded consensus EPS estimates twice.

AeroVironment, which is part of the Zacks Aerospace – Defense Equipment industry, reported revenue of $132.62 million for the quarter ended April 2022, missing Zacks’ consensus estimate by 0.12%. That compares to revenues of $136.02 million a year ago. The company has been unable to beat consensus revenue estimates for the past four quarters.

The sustainability of the immediate stock price movement based on recently released numbers and future earnings forecasts will primarily depend on management’s comments on the earnings call.

AeroVironment shares have gained about 33.5% since the start of the year compared to the -18.2% decline in the S&P 500.

What’s next for AeroVironment?

Although AeroVironment has outperformed the market so far this year, the question on investors’ minds is: what’s next for the stock?

There is no easy answer to this key question, but one reliable measure that can help investors answer it is the company’s earnings outlook. This includes not only current consensus earnings expectations for the upcoming quarter(s), but also how those expectations have changed recently.

Empirical research shows a strong correlation between short-term stock movements and trends in earnings estimate revisions. Investors can track these revisions on their own or rely on a proven scoring tool like Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Before this publication of results, the trend of estimate revisions for AeroVironment: mixed. While the magnitude and direction of estimate revisions may change following the release of the company’s earnings report, the current situation translates into a No. 3 (hold) Zacks ranking for the stock. Thus, the shares should move in line with the market in the near future. You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how the estimates for the next few quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.33 on $117.23 million in revenue for the upcoming quarter and $1.74 on $493.74 million in revenue for the current fiscal year.

Investors should be aware that the outlook for the sector can also have a significant impact on stock performance. In terms of Zacks industry rankings, Aerospace – Defense Equipment is currently in 37% of Zacks 250+ industries. Our research shows that the top 50% of industries ranked by Zacks outperform the bottom 50% by a factor of more than 2 to 1.

Hexcel (HXL), another stock in the same sector, has yet to report results for the quarter ending June 2022.

This lightweight composite materials maker is expected to post quarterly earnings of $0.31 per share in its next report, representing a year-over-year change of +287.5%. The consensus EPS estimate for the quarter remained unchanged for the past 30 days.

Hexcel’s revenue is expected to be $388.33 million, up 21.2% from the prior year quarter.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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