Latest news with #AVAV
Yahoo
4 days ago
- Business
- Yahoo
Pete Hegseth Is Sending Drone Stocks Sky High. How Should You Play RCAT, AVAV, and KTOS Now?
U.S. drone stocks are flying high after Defense Secretary Pete Hegseth said he's fully committed to 'unleashing American drone dominance.' Hegseth confirmed plans of 'rescinding restrictive policies' to boost manufacturing and accelerate the use of unmanned systems for military purposes in a video recorded at the Pentagon on Friday. Creating a 38% 'Dividend' on SOFI Stock Using Options Circle Stock Warning: CRCL Could Fall More Than 50% From Here Joby Aviation Just Hit a New 52-Week High. Should You Buy the Flying Car Stock Here? Tired of missing midday reversals? The FREE Barchart Brief newsletter keeps you in the know. Sign up now! Shares of AeroVironment (AVAV) and Kratos Defense (KTOS) rallied more than 10% each, while their smaller peer, Red Cat (RCAT) soared over 20% today. Defense Secretary Pete Hegseth has reportedly instructed the Pentagon to treat drones as 'cheap, rapidly replaceable' munitions – removing bureaucratic bottlenecks and accelerating battlefield deployment. Moving forward, commanders will have the authority to directly procure and test unmanned aerial systems (UAS), including 3D-printed prototypes, bypassing legacy approval processes. This fast-track integration of drone technology into combat and training programs will likely boost demand for domestic suppliers. For drone stocks, including AVAV, KTOS, and RCAT, this means increased orders, faster revenue cycles, and a front-row seat to a multi-year defense-tech boom. Investors should consider building a position in the aforementioned three drone stocks following Hegseth's statement as each stands to play a central role in the American drone supremacy. AeroVironment is a leading supplier of tactical drones and loitering munitions to the U.S. military. Its flagship products like Switchblade and Puma systems have been widely deployed in Ukraine and are central to battlefield reconnaissance and precision strikes. Kratos specializes in high-performance, jet-powered tactical drones such as the XQ-58A Valkyrie, designed for manned-unmanned teaming and autonomous combat missions. Its drones are built for affordability, survivability, and rapid deployment in contested environments. Red Cat Holdings develops low-cost, portable ISR and precision strike drones through its Teal and FlightWave subsidiaries. Its Black Widow drone won the U.S. Army's Short Range Reconnaissance contract, and its FANG FPV drone is optimized for lethal missions. Note that Hegseth's remarks arrive shortly after President Donald Trump signed an executive order in favor of drone technology. U.S. drone stocks are particularly exciting to own following Hegseth's video as Wall Street has a consensus 'Strong Buy' rating on all three. However, today's rally has pushed Kratos well past its mean price target. On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
5 days ago
- Business
- Yahoo
This Red-Hot Drone Stock Just Got a $2.7 TRILLION Boost
The world of defense technology is heating up, and drone manufacturers are soaring to new heights — none more so than AeroVironment (AVAV). In recent years, this once-under-the-radar defense tech firm has been capturing investor attention, driven by surging demand for its advanced uncrewed aircraft systems (UAS) and loitering munitions. However, AeroVironment's latest catalyst is even more compelling: a massive defense spending commitment from NATO. At a recent summit, NATO members pledged to increase defense budgets to 5% of GDP by 2035, up dramatically from the previous 2% target. Defense analysts and investors quickly honed in on the potential winners of this monumental shift. One name stood out: AeroVironment. This Underdog AI Stock Just Got a New Street-High Price Target 'The Most Patriotic Thing You Can Do Is Not Pay the IRS' Says Grant Cardone as OBBBA Signed into Law — Here's How Much You'll Save Texas Just Passed Quantum Computing Legislation. How Should You Play IONQ Stock Here? Markets move fast. Keep up by reading our FREE midday Barchart Brief newsletter for exclusive charts, analysis, and headlines. In this article, we'll explore how AVAV is set to benefit from the NATO pledge, analyze its recent financial performance, and assess whether this red-hot drone stock still has room to fly higher. With a market cap of $11.7 billion, AeroVironment (AVAV) stands out as a prominent player in the defense technology industry. The company is known for its UAS, which include small- and medium-sized drones, along with its Kinesis command and control software. It also offers counter-UAS and loitering munitions solutions, providing modern warfighters with precision firepower and real-time intelligence. Shares of the defense technology company have rallied 55.1% on a year-to-date basis. BTIG analyst Andre Madrid stated in a report last week that NATO's sweeping new defense spending pledge could almost double the market for U.S. defense contractors over the next 10 years. At the June 24-25 NATO summit in the Netherlands, all member nations except Spain agreed to increase defense spending to 5% of gross domestic product by 2035, up from the previous 2% target. Of that total, 3.5% is designated for core defense areas such as equipment, personnel, and operations, while the remaining 1.5% is allocated to infrastructure and defense industrial capacity. BTIG's Madrid projected that NATO defense budgets could reach $3 trillion per year by 2035, with up to $8.8 trillion in total military equipment spending over the next decade if current trends continue. For U.S. defense firms, this translates into a $2.7 trillion export opportunity — nearly twice the $1.4 trillion potential had spending remained at 2% of GDP. 'The higher defense pledge could nearly double the addressable market for U.S. contractors,' the analyst wrote. U.S. companies currently make up about two-thirds of Europe's military equipment imports, a share Madrid anticipates will remain stable. Within BTIG's coverage, Madrid highlighted AeroVironment and several other companies as well-positioned to benefit. During AVAV's Q4 earnings call, held a day before NATO's 5% defense spending pledge, Madrid asked about the potential impact of the initiative. AeroVironment CEO Wahid Nawabi stated that the company is well-positioned to meet the rising demand in Europe, thanks to its reliable and scalable systems and established presence. Notably, on June 27, BTIG's Madrid raised the firm's price target on AVAV stock from $225 to $300 while maintaining a 'Buy' rating, arguing that the company's valuation remains attractive despite its strong YTD rally. The analyst pointed out that, based on estimated enterprise value, AeroVironment is trading at around 8x projected 2025 pro forma sales — significantly lower than the double-digit sales multiples often seen among private defense tech peers. On July 1, AVAV stock tumbled more than 11% following the company's announcement of two public offerings to raise capital. The company issued 3.52 million shares at $248, raising $875 million, and also secured $650 million through 0% convertible notes due in 2030, with a conversion price equivalent to $322.40. The $1.47 billion in net proceeds will be used to pay down $965.3 million in debt under the term loan and revolving credit facility, with the remaining funds allocated to expanding manufacturing capacity. Many analysts and investors tied this capital raise to the recent BlueHalo acquisition, which carried $770 million in gross debt, suggesting it will need to deliver significant value to justify the dilution. On June 26, AeroVironment announced that its Wildcat UAS reached several key development milestones as part of the Defense Advanced Research Projects Agency's (DARPA) Early VTOL Aircraft Demonstration (EVADE) program. Wildcat has successfully completed VTOL-to-forward-flight transitions, validated its core flight and propulsion systems, and started integrating key mission payloads, marking swift progress toward achieving an operationally relevant capability. On June 25, AeroVironment stock jumped more than 21% after the company reported record revenue, bookings, and profits for the fourth quarter and full year, driven by soaring demand for its uncrewed and loitering munitions systems. The defense technology firm reported quarterly revenue of $275.1 million, up 40% year-over-year, making it the strongest quarter in the company's history. Its annual revenue grew 14% year-over-year to $820.6 million, surpassing the upper end of initial guidance and marking the fifth consecutive year of double-digit revenue growth. CEO Nawabi attributed the strong results to growing global demand for AeroVironment's portfolio of UAS and loitering munitions. The company's Q4 gross profit climbed 33% year-over-year to $100.3 million, as scaling benefits offset an accelerated intangible amortization expense, resulting in a record adjusted EBITDA of $61.6 million. Adjusted EBITDA for the full year was also a record $146.4 million. Fourth-quarter net income nearly tripled to $16.7 million, despite an $18.4 million non-cash UGV goodwill impairment, while full-year net income stood at $43.6 million. Meanwhile, the company secured a record $1.2 billion in total bookings throughout the fiscal year, a strong signal of future business growth. This contributed to a funded backlog of confirmed, contracted future revenue that reached $726.6 million, nearly doubling from the prior year. Keep in mind that AeroVironment's fiscal year ends in April, so the results do not include any contributions from the BlueHalo acquisition, which closed in May, and instead reflect only the company's operational success. Looking ahead, management provided highly confident guidance for fiscal 2026, projecting revenue between $1.9 billion and $2 billion, driven by the first full-year contribution from BlueHalo. That represents a 137% year-over-year increase at the midpoint. Adjusted EBITDA is expected to more than double, ranging from $300 million at the low end to $320 million at the high end. Analysts tracking the company expect its adjusted EPS to remain largely unchanged year-over-year at $3.23 for fiscal 2026, while revenue is estimated to surge 145.27% from the previous year to $2.01 billion. From a valuation standpoint, AVAV stock doesn't look cheap. The stock trades at 78.3x forward adjusted earnings and has a forward EV/EBITDA multiple of 37.16x — both well above the sector medians and its historical averages. The war in Ukraine underscored the critical role of drones in modern warfare, likely contributing to higher valuation multiples for drone manufacturers. However, NATO's new defense spending pledge, along with the increasing importance of drones, makes me believe the premium is justified. Wall Street analysts are very bullish on AeroVironment stock, as reflected in the consensus 'Strong Buy' rating. Out of the nine analysts covering the stock, eight recommend a 'Strong Buy' and one gives a 'Moderate Buy' rating. The average price target for AVAV stock is $274, indicating upside potential of 16.1% from current levels. On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
07-07-2025
- Business
- Yahoo
5 Revealing Analyst Questions From AeroVironment's Q1 Earnings Call
AeroVironment's first quarter saw a positive market reaction as the company's revenue growth outpaced Wall Street expectations, reflecting strong demand for its unmanned systems and defense technology products. Management cited the launch of three new offerings—P550, JUMP 20X, and Red Dragon—and robust loitering munitions sales, especially Switchblade, as primary growth drivers. CEO Wahid Nawabi emphasized that 'our investments in all business segments helped drive demand for our products, which led to key domestic and international wins.' International momentum and sizable contract wins, particularly with the U.S. Army and allied nations, contributed to the quarter's performance. Is now the time to buy AVAV? Find out in our full research report (it's free). Revenue: $275.1 million vs analyst estimates of $243.7 million (39.6% year-on-year growth, 12.9% beat) Adjusted EPS: $1.61 vs analyst estimates of $1.41 (13.9% beat) Adjusted EBITDA: $61.6 million vs analyst estimates of $55.53 million (22.4% margin, 10.9% beat) Adjusted EPS guidance for the upcoming financial year 2026 is $2.90 at the midpoint, missing analyst estimates by 27.9% EBITDA guidance for the upcoming financial year 2026 is $310 million at the midpoint, above analyst estimates of $240.7 million Operating Margin: 5%, up from 3% in the same quarter last year Market Capitalization: $12.11 billion While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Louie DiPalma (William Blair) asked about the U.S. Army's transformation initiative and drone procurement plans. CEO Wahid Nawabi explained that these represent incremental opportunities and that AeroVironment is positioned to benefit from modernization priorities in drones and counter-UAS technologies. Greg Conrad (Jefferies) pressed on revenue guidance ranges and Blue Halo integration. Nawabi clarified that contract timing, especially U.S. DoD awards, drives the forecast range, and early integration focus is on cost—not revenue—synergies. Peter Arment (Baird) questioned segment-level growth variability, especially in Autonomous Systems. Nawabi attributed this to timing and scale of U.S. government contracts, emphasizing the company's readiness to deliver if budget approvals are timely. Andre Madrid (BTIG) inquired about potential impact from a proposed 5% NATO defense spending pledge. Nawabi said AeroVironment is well-positioned to meet increased European demand due to its proven, scalable systems and established presence. Pete Skibitski (Alembic Global) sought clarification on backlog dynamics and capital expenditures. Management confirmed backlog changes resulted from conversion of unfunded to funded contracts, not cancellations, and discussed elevated CapEx to support production for upcoming large programs. Going forward, the StockStory team will be closely monitoring (1) progress on integrating Blue Halo's technologies and realizing expected cost and operational synergies, (2) execution against major U.S. and international defense contracts—including Switchblade and new product orders, and (3) expansion of manufacturing capacity to meet growing demand. Additional focus will be on AeroVironment's ability to secure wins in NATO markets as European defense budgets increase. AeroVironment currently trades at $244.75, up from $191.22 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it's free). Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
Yahoo
06-07-2025
- Business
- Yahoo
AeroVironment, Inc. (AVAV) Is Part Of An 'Idea-Driven' Market, Says Jim Cramer
We recently published . AeroVironment, Inc. (NASDAQ:AVAV) is one of the stocks Jim Cramer recently discussed. AeroVironment, Inc. (NASDAQ:AVAV) is an American defense contractor whose shares have had a great second quarter. The stock has gained 57% year-to-date, primarily on the back of a strong earnings report that saw the firm's $1.61 in EPS and $275 million in revenue beat analyst estimates of $1.39 and $242 million. However, the shares have experienced fluctuation and dipped by 11.4% after management decided to take advantage of the share price performance to reduce its debt and issue equity. Cramer has been discussing AeroVironment, Inc. (NASDAQ:AVAV) quite frequently these past couple of weeks. The CNBC host believes that he has helped the firm's shares rise from $180 to $290 in an idea-driven market: 'We are in an idea-driven market and in an idea-driven market I go out with AeroVironment at 190 and then it goes to 290 because I mentioned it in the Mad Dash and then they're able to do a financing.' A rocket on its way to the sky, representing the power of the company's unmanned aircraft systems. His previous remarks about AeroVironment, Inc. (NASDAQ:AVAV) mentioned Goldman Sachs: 'Last week on Stop Trading, I said people should buy AeroVironment, I had them on. . .and AeroVironment was at 180, and now AeroVironent's at 295. While we acknowledge the potential of AVAV as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
05-07-2025
- Business
- Yahoo
AeroVironment, Inc. (AVAV) Is Part Of An 'Idea-Driven' Market, Says Jim Cramer
We recently published . AeroVironment, Inc. (NASDAQ:AVAV) is one of the stocks Jim Cramer recently discussed. AeroVironment, Inc. (NASDAQ:AVAV) is an American defense contractor whose shares have had a great second quarter. The stock has gained 57% year-to-date, primarily on the back of a strong earnings report that saw the firm's $1.61 in EPS and $275 million in revenue beat analyst estimates of $1.39 and $242 million. However, the shares have experienced fluctuation and dipped by 11.4% after management decided to take advantage of the share price performance to reduce its debt and issue equity. Cramer has been discussing AeroVironment, Inc. (NASDAQ:AVAV) quite frequently these past couple of weeks. The CNBC host believes that he has helped the firm's shares rise from $180 to $290 in an idea-driven market: 'We are in an idea-driven market and in an idea-driven market I go out with AeroVironment at 190 and then it goes to 290 because I mentioned it in the Mad Dash and then they're able to do a financing.' A rocket on its way to the sky, representing the power of the company's unmanned aircraft systems. His previous remarks about AeroVironment, Inc. (NASDAQ:AVAV) mentioned Goldman Sachs: 'Last week on Stop Trading, I said people should buy AeroVironment, I had them on. . .and AeroVironment was at 180, and now AeroVironent's at 295. While we acknowledge the potential of AVAV as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
