Shares of U.S. defense contractor AeroVironment have staged a remarkable advance in recent months, trading near record highs. This rally is fueled by significant contract wins and a favorable industry backdrop. However, a closer examination reveals a more complex picture with divergent indicators emerging from the company’s latest performance.
Analyst Sentiment and Price Targets Remain Bullish
The prevailing view among market analysts continues to be optimistic. The average price target for AeroVironment stock stands at approximately $390, with estimates ranging from a low of $285 to a high of $486. In a recent move, Citizens Bank reaffirmed its “Market Outperform” rating, attaching a $400 price target. The firm highlighted AeroVironment’s commanding position within the high-growth defense technology sector.
Following a gain of more than 100% over the past 30 days, the equity was recently quoted around $393. Investors are now looking ahead to the next key milestone: the release of financial results for the third quarter of fiscal year 2026, expected in March.
Revenue Strength Contrasts with Earnings Shortfall
The company’s most recent quarterly report showcased explosive top-line growth. Revenue soared by over 150% year-over-year to $472.5 million, surpassing even the most optimistic analyst forecasts. This surge underscores robust demand for the company’s portfolio of unmanned systems and precision-guided weaponry.
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Despite this impressive sales performance, profitability metrics disappointed. Earnings per share (EPS) came in at $0.44, falling well short of the consensus estimate of $0.87. Management has provided full-year EPS guidance for fiscal 2026 in the range of $3.40 to $3.55. The apparent disconnect between rapid revenue expansion and current earnings power remains a focal point for shareholder scrutiny.
Strategic Moves and Insider Trading Activity
AeroVironment is actively pursuing growth initiatives. The company recently unveiled a new unmanned underwater vehicle, the “Mission Specialist Wraith.” It has also secured a strategic partnership with Parry Labs for a major U.S. Army drone program and leased a substantial new production facility in Utah.
Concurrently, transactions by company insiders have drawn attention. Two executives, Chief Financial Officer Kevin Patrick McDonnell and Director Stephen Page, sold shares. These disposals, however, were executed under pre-arranged trading plans (Rule 10b5-1) established in the summer and fall of 2025, respectively. Such scheduled sales are generally considered less indicative of an insider’s immediate outlook on the stock compared to discretionary trades.
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