AeroVironment Earnings Preview

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AeroVironment (NAS: AVAV) met its estimates last quarter, but investors hope that it will beat them this quarter. The company will unveil its latest earnings on Tuesday, Dec. 6. AeroVironment is engaged in the design, development, production, and support of unmanned aircraft systems and efficient energy systems for various industries and governmental agencies.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on AeroVironment with nine of 12 analysts rating it hold. Analysts don't like AeroVironment as much as competitor AAR overall. Six out of seven analysts rate AAR a buy compared to three of 12 for AeroVironment. Analysts still rate the stock a hold, but they are a bit more wary about it compared to three months ago.
  • Revenue forecasts: On average, analysts predict $74.5 million in revenue this quarter. That would represent a rise of 16.8% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.20 per share. Estimates range from $0.14 to $0.25.

What our community says:
CAPS All-Stars are solidly backing the stock with 98.6% awarding it an "outperform" rating. The community at large agrees with the All-Stars with 96.6% granting it a rating of "outperform." Fools are gung-ho about AeroVironment and haven't been shy with their opinions lately, logging 254 posts in the past 30 days. AeroVironment has a bullish CAPS rating of five out of five stars that reflects the Fool community assessment.

Management:
Revenue has now gone up for three straight quarters. The company boosted its gross margin by 3.5 percentage points in the last quarter. Revenue rose 62.2% while cost of sales rose 53.8% to $40.3 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q1

Q4

Q3

Q2

Gross Margin

35.0%

46.4%

40.4%

34.1%

Operating Margin

0.7%

23.7%

18.6%

0.6%

Net Margin

0.5%

16.6%

13.6%

0.4%

One final thing: If you want to keep tabs on AeroVironment movements, and for more analysis on the company, make sure you add it to your Watchlist.

Motley Fool newsletter services have recommended buying shares of AeroVironment.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Earnings estimates provided by Zacks.

At the time this article was published

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