You may never have heard of drone maker AeroVironment (AVAV), but there is, increasingly, quite a bit going for it. This drone maker is seeing demand for drones start to pick up, and there are even some signs it may end up connected to the “Golden Dome” defense project looking to fire up in the United States. All of this was good enough for investors, who piled in like no tomorrow and sent shares blasting up nearly 22% in Wednesday afternoon’s trading.
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AeroVironment offered up some great news for its investors with an earnings report that blasted through expectations like a drone through wet tissue paper. Reports noted that adjusted profit per share came in at $1.61, which was well above analyst estimates calling for $1.39. Revenue likewise surpassed expectations by a healthy margin, coming in at $275.1 million., up 40% against a year prior. Analysts were looking for $241.6 million.
The biggest source of all that revenue was defense sector demand, reports noted, as militaries the world over keep adding drones to their loadouts in increasing numbers. If anyone ever thought it was odd that a Robin Williams movie from 1992—Toys—would prove prescient in military science, well, this was all the proof of that anyone could ask for.
Centerpiece of the Golden Dome
But that was not all, as AeroVironment’s CEO Wahid Nawabi took to an interview with infamous market analyst Jim Cramer to talk about the company’s future. Nawabi revealed that AeroVironment had a lot of tools in its toolbelt, and would be sufficient to supply “…many, many pieces of the puzzle for an effective and successful adoption and implementation of the Golden Dome.”
The Golden Dome defense system—noted President Trump, who advanced its existence—is projected to cost around $175 billion and can intercept a wide range of missiles, whether launched from various points around the world or even towards the world, fired from space. And, since AeroVironment now includes BlueHalo’s space-related systems, AeroVironment now has many key tools that could be put to use in putting the Golden Dome system together. Given recent moves to open up government contracting, AeroVironment may have the best chance it could have to get in on the action.
Is AeroVironment a Good Stock to Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on AVAV stock based on six Buys assigned in the past three months, as indicated by the graphic below. After a 0.24% rally in its share price over the past year, the average AVAV price target of $213 per share implies 11% downside risk.
