AeroVironment, Inc. (NASDAQ:AVAV) Earnings Preview: Q3 Fiscal 2025 Insights

BTIG raised its price target on AeroVironment (NASDAQ:AVAV) to $300 from $225 while maintaining a Buy rating, arguing that the drone and defense tech specialist’s valuation remains attractive despite its recent rally.

Shares of AeroVironment have jumped 43% week-to-date, but BTIG believes the stock is still compelling given robust demand in the current defense spending environment. The analyst highlighted that, based on estimated enterprise value, AeroVironment trades at roughly 8x 2025 pro forma sales—well below multiples seen among private defense tech peers, which often command double-digit sales multiples.

BTIG contends that AeroVironment’s growth potential, driven by rising global demand for unmanned systems and cutting-edge defense technologies, supports further upside, and the stock’s valuation is still reasonable relative to its long-term opportunities.

AeroVironment, Inc. (NASDAQ:AVAV) is a leading entity in the Aerospace - Defense Equipment sector, known for its cutting-edge unmanned aircraft systems and tactical missile systems. The company's products cater to a diverse range of markets, including defense, government, and commercial sectors, positioning it as a formidable competitor against industry giants such as Lockheed Martin and Northrop Grumman.

On June 24, 2025, AeroVironment reported an earnings per share (EPS) of $1.61, significantly outperforming the anticipated $1.44. This marked a notable increase from the $0.43 EPS reported in the corresponding quarter of the previous year. The earnings surprise for this quarter was +11.81%, as highlighted by Zacks, demonstrating AeroVironment's consistent ability to surpass Wall Street expectations. Furthermore, AeroVironment achieved a revenue of approximately $275.05 million, exceeding the forecasted $242.69 million. This revenue figure represents a substantial growth of 39.6% compared to the same period last year. The company has consistently beaten consensus revenue estimates three times over the past four quarters, underscoring its robust financial performance.

Despite these impressive financial outcomes, AeroVironment's stock experienced a downturn. The company's high price-to-earnings (P/E) ratio of approximately 164.18 suggests a high valuation relative to its earnings. Moreover, the price-to-sales ratio stands at about 11.88, indicating that investors are willing to pay nearly 12 times the company's sales per share. AeroVironment's financial health is further bolstered by a modest debt-to-equity ratio of 0.069, reflecting a low level of debt compared to its equity.

The current ratio is strong at 4.22, suggesting the company's solid ability to cover short-term liabilities with short-term assets. However, the enterprise value to operating cash flow ratio is negative at -694.15, indicating potential challenges in generating cash flow from operations relative to its valuation.

• AeroVironment, Inc. (NASDAQ:AVAV) is a leading technology company in unmanned aircraft systems and tactical missile systems, facing competition from giants like Lockheed Martin and Boeing.
• BTIG maintained its "Buy" rating for AeroVironment, with a stock price of $190.56, as the company prepares for its fourth-quarter earnings release, expecting earnings of $1.42 per share and revenue of $242.69 million.
• AeroVironment announced a strategic partnership with UAS Denmark to enhance UAS capabilities in Europe, potentially strengthening its market position and offering new growth opportunities.

AeroVironment, Inc. (NASDAQ:AVAV) is a technology company specializing in unmanned aircraft systems (UAS) and tactical missile systems. It serves both defense and commercial markets, providing innovative solutions for surveillance and reconnaissance. AeroVironment faces competition from companies like Lockheed Martin and Boeing in the defense sector.

On June 24, 2025, BTIG maintained its "Buy" rating for AeroVironment, with a recommendation to hold the stock. At that time, the stock price was $190.56. This decision comes as AeroVironment prepares to release its fourth-quarter earnings results, which are expected to show earnings of $1.42 per share and revenue of $242.69 million.

Ahead of the earnings release, AeroVironment's stock experienced a slight increase of 0.8%, closing at $191.23 on Monday. However, the current stock price is $190.55, reflecting a decrease of approximately 0.36% or $0.69. The stock has traded between $187.57 and $193 today, with a market capitalization of approximately $8.7 billion.

AeroVironment recently announced a strategic partnership with UAS Denmark on June 18, aimed at enhancing allied UAS capabilities in Europe. This partnership could potentially strengthen AeroVironment's position in the European market, providing new growth opportunities for the company.

Over the past year, AeroVironment's stock has reached a high of $236.60 and a low of $102.25. The trading volume for AVAV is 145,120 shares on the NASDAQ exchange, indicating active investor interest. As the company prepares to release its earnings, investors will be closely watching for any updates that could impact the stock's performance.

AeroVironment, Inc. (NASDAQ:AVAV) is a technology company specializing in unmanned aircraft systems and tactical missile systems. As a leader in the defense and aerospace industry, AVAV competes with companies like Lockheed Martin and Boeing. On June 24, 2025, AVAV is set to release its quarterly earnings, with analysts estimating an earnings per share (EPS) of $1.44 and projected revenue of approximately $242.7 million.

The anticipated EPS of $1.44 represents a significant year-over-year growth of 234.9%, as highlighted by analysts. This growth indicates a strong performance compared to the previous year. Revenue is expected to reach $243.67 million, marking a 23.7% increase from the same quarter last year. These figures suggest a positive trajectory for AVAV's financial performance.

Despite the positive outlook, there has been a downward revision of 21.7% in the consensus EPS estimate over the past 30 days. This reassessment by analysts may influence investor behavior and impact the short-term price performance of AVAV stock. Such revisions are crucial as they reflect changing expectations and market conditions.

AVAV's financial metrics reveal a high valuation, with a price-to-earnings (P/E) ratio of approximately 161.42. This indicates that investors are willing to pay a premium for the company's earnings. The price-to-sales ratio stands at about 11.68, suggesting that investors are paying $11.68 for every dollar of sales. However, the enterprise value to operating cash flow ratio is negative at -682.53, indicating potential challenges in generating cash flow from operations.

The company maintains a low debt-to-equity ratio of 0.069, reflecting a conservative use of debt in its capital structure. Additionally, AVAV has a strong current ratio of 4.22, indicating good short-term financial health and the ability to cover its current liabilities with its current assets. These metrics suggest that AVAV is well-positioned to manage its financial obligations and continue its growth trajectory.

AeroVironment, Inc. (NASDAQ:AVAV) is a prominent player in the defense and aerospace industry, known for its innovative unmanned aircraft systems and tactical missile systems. The company is set to release its third-quarter fiscal 2025 earnings on March 4, 2025. Analysts predict earnings per share (EPS) of $0.58 and revenue of approximately $206.4 million for this period.

AeroVironment has a history of exceeding earnings expectations, with an average earnings surprise of 54.69% over the past four quarters. Despite a projected 7.9% decline in EPS compared to the same period last year, the company is expected to report a 1.4% increase in revenue, reaching $189.25 million. This growth is largely driven by the strong performance of its Loitering Munitions Systems (LMS) and Medium Weight (MW) units.

The LMS segment, in particular, is benefiting from increased global demand due to ongoing conflicts and the U.S. Department of Defense's need for resupply. The Zacks Consensus Estimate for this segment's quarterly revenues is approximately $92.3 million. This demand is likely to have a positive impact on AeroVironment's overall revenue growth, despite the challenges posed by higher marketing expenses.

AeroVironment's financial metrics reflect its strong market position. The company has a price-to-earnings (P/E) ratio of approximately 82.14, indicating high investor confidence. Its price-to-sales ratio is about 5.29, and the enterprise value to sales ratio is approximately 5.24, both suggesting a solid valuation relative to sales. The low debt-to-equity ratio of 0.041 and a current ratio of 4.61 highlight the company's strong financial health and ability to cover short-term liabilities.

AeroVironment (NASDAQ:AVAV) stock surged more than 5% intra-day today after the company reported its Q4 earnings results, with revenue of $186 million beating the Street estimate of $164.97 million. EPS came in at $0.99, compared to the Street estimate of $1.02.

The company provided its full 2024 year outlook, anticipating EPS to be in the range of $2.30-$2.60, compared to the Street estimate of $2.04, and revenue in the range of $630-$660 million, compared to the Street estimate of $600 million.

CEO Wahid Nawabi expressed confidence in AeroVironment's prospects for strong growth in fiscal 2024, citing the company's record-setting revenue and backlog. Although AeroVironment was not chosen to move forward with increment 2 of FTUAS (Future Tactical Unmanned Aircraft Systems), Nawabi emphasized that the company's current position bodes well for its future. He stated that AeroVironment has never been in better shape in terms of its future outlook than it is today.