What Happened?
Shares of aerospace and defense company AeroVironment (NASDAQ: AVAV) fell 5.8% in the afternoon session after the company reported disappointing fourth-quarter results, missing Wall Street's expectations on both earnings and revenue, and lowered its full-year financial outlook.
The defense drone maker reported adjusted earnings of $0.64 per share on revenue of $408 million, falling short of analyst forecasts for $0.69 in earnings and $478 million in revenue. While revenue grew an impressive 143% year on year, the significant miss on the top line raised concerns. Profitability was also a weak spot, with adjusted EBITDA falling 33.5% short of consensus estimates. Looking ahead, management lowered its full-year revenue guidance to $1.9 billion at the midpoint and cut its adjusted earnings per share outlook by nearly 16% to a midpoint of $2.93.
The shares closed the day at $207.01, down 7.2% from previous close.
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What Is The Market Telling Us
AeroVironment’s shares are extremely volatile and have had 42 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 5 days ago when the stock gained 5.8% on the news that the company announced it was awarded a three-year, $97.4 million contract from the U.S. Army to develop a next-generation test environment for advanced missile defense systems. This news appeared to fuel positive investor sentiment. The stock's rise also came as the broader defense sector experienced a rally. The move happened amid rising geopolitical tensions in West Asia, which renewed market focus on defense companies. Reports noted that the Nifty Defence Index rose more than 3% during the session, extending its recent gains.
AeroVironment is down 19% since the beginning of the year, and at $207.45 per share, it is trading 49.4% below its 52-week high of $409.83 from October 2025. Investors who bought $1,000 worth of AeroVironment’s shares 5 years ago would now be looking at an investment worth $1,696.
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