The stock of AeroVironment (AVAV) is down nearly 10% after the drone maker reported financial results that missed Wall Street’s targets across the board.
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For what was its fiscal third-quarter, AeroVironment announced earnings per share (EPS) of $0.64, which fell short of the $0.69 expected among analysts. Revenue of $408 million was below the consensus forecast on Wall Street of $476 million.
Management added that their funded backlog of orders stood at $1.1 billion at quarter’s end, which was flat compared with the previous quarter. AVAV stock had risen 84% over the past 12 months but recently plunged 17% on March 2 due to concerns over a $1.7 billion U.S. Space Force contract.
AeroVironment’s income statement. Source: The Fly
The Space Force Contract
Heading into this latest print, investors were worried that the U.S. Space Force would reopen a contract it has with AeroVironment related to the tracking of spacecraft from Earth. The program is called the “Satellite Communications Augmentation Resource,” or SCAR for short.
The SCAR program is big and worth about $1.7 billion annually to AeroVironment, whose current backlog totals $3.5 billion. Analysts have called for management at the company to provide details and answers on the situation with the SCAR contract.
Is AVAV Stock a Buy?
AeroVironment has a consensus Strong Buy rating among 15 Wall Street analysts. That rating is based on 13 Buy, one Hold, and one Sell recommendations issued in the last three months. The average AVAV price target of $356.69 implies 60% upside from current levels. These ratings could change after the company’s latest financial results.
