AeroVironment stock soars after strong quarter, raised outlook

AeroVironment reported fourth-quarter revenue of $641 million, a 30% increase from a year earlier, and full-year sales of $1.98 billion. The company said adjusted EBITDA margin widened to 22% and backlog exceeded $1.2 billion, producing a book-to-bill ratio of about 1.4. Management raised full-year revenue guidance to $2.13 billion–$2.23 billion, with the top end above a prior estimate of $2.17 billion.

Shares rose more than 20% in after-hours trading, reaching a high near $168 after earlier trading this year hit about $135. The gain was the stock’s largest daily advance so far this year; the shares remain well below last year’s record high near $418.

Company executives attributed the results to rising demand for small unmanned aircraft, counterdrone systems and space technologies. The U.S. Department of Defense has budgeted more than $75 billion for related programs in the next fiscal year.

The company said battlefield use of lower-cost drones by state actors, including strikes on high-value targets, has influenced procurement priorities. In a statement the chief executive wrote that the U.S. military and allied forces are ‘playing catch-up’ on adoption and deployment of these systems.

Competition for market share is increasing. Anduril has reached a reported $61 billion valuation, Shield AI raised $240 million at a $5.3 billion valuation, and other firms in the sector include Neros Technologies and Firestorm Labs.

Investors focused on valuation metrics after the results: AeroVironment’s forward price-to-earnings ratio is about 48. Technical indicators cited by market watchers show the stock remains below the 61.8% Fibonacci retracement level and under major moving averages following a recent retest of key support levels.