AeroVironment drops 7.5% to $148 despite strong quarterly results

AeroVironment shares fell 7.5% to $148.20 Monday, extending a pullback from $160.22 as the drone maker announced a $100 million campus investment.

According to MarketBeat data, the stock carries an average rating of Moderate Buy with a consensus price target of $266.68, implying roughly 80 percent upside from Monday's close. Wedbush initiated coverage with an outperform rating and a $250 price objective on June 30, while Needham & Company set a $225 target on July 9. BTIG Research reaffirmed a buy rating with a $205 price target, and KeyCorp reiterated an overweight rating on July 28.

The stock traded as low as $148.14 during the session, with volume of 1,225,457 shares — 24 percent below the average session volume of 1,613,946. The company reported Q4 earnings on June 29, posting EPS of $1.84, beating the $1.47 consensus by $0.37. Revenue reached $641.62 million, up 133.3 percent year over year and ahead of the $555.97 million estimate. The company guided FY2027 EPS to $3.02-$3.34, with analysts projecting $3.26 for the current fiscal year. The company maintains a quick ratio of 3.59, a current ratio of 4.30, and a debt-to-equity ratio of 0.17.

The decline puts AVAV below its 50-day moving average of $161.80 and well under its 200-day average of $190.00. The stock carries a market capitalization of $7.53 billion with a negative PE ratio of -40.27 and a beta of 1.41. The next event to watch is the company's FY2027 earnings, with analysts projecting $3.26 EPS.

Insider activity showed modest selling. Chief accounting officer Brian Charles Shackley sold 205 shares at $201.86 on Aug. 14, and director Stephen F. Page sold 250 shares at $191.98 on Aug. 17, both under pre-arranged Rule 10b5-1 plans. Insiders sold 705 shares worth $132,979 over the past three months, with insiders holding 0.81 percent of the company.

Institutional investors have been accumulating the stock. California State Teachers Retirement System increased its holdings by 16,307.2 percent in the second quarter, now owning 6,215,051 shares worth $1.03 billion. BlackRock purchased a new stake worth $574.6 million, while Norges Bank added a $94.7 million position. Bank of America Corp DE bought a new position worth $67.5 million, and American Capital Management added $69.7 million. Institutional investors own 86.38 percent of the company.

The company, headquartered in Monrovia, California, specializes in unmanned aerial systems including the Raven, Puma, and Switchblade series, along with tactical missiles and electric vehicle charging infrastructure. The $100 million investment in a new adaptable company-owned campus points to long-term expansion plans despite the near-term stock weakness. The broader drone sector has been under pressure as defense budget debates continue, though demand for loitering munitions and reconnaissance systems remains elevated. AeroVironment's Switchblade series has seen growing adoption in modern military operations, and the company's small UAS portfolio serves intelligence, surveillance, and reconnaissance missions for the U.S. military and allied forces.

The decline puts the stock at its lowest level since the post-earnings pullback began, testing the 50-day moving average. Investors will watch for defense budget developments and drone demand trends as the company heads into its next earnings cycle. With a beta of 1.41, the stock carries higher volatility than the broader market, and the negative PE ratio reflects the company's current earnings position despite strong revenue growth.

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