AeroVironment misses Q3 revenue estimates; takes $151 mln impairment

Overview

• U.S. defense technology firm's fiscal Q3 revenue rose 143% yr/yr but missed analyst expectations

• Company posted $151.3 mln goodwill impairment in Space unit after stop-work order on key contract

• Non-GAAP adjusted EPS for fiscal Q3 was $0.64, up from $0.30 a year earlier

Outlook

• AeroVironment sees fiscal 2026 revenue between $1.85 bln and $1.95 bln

• Company expects fiscal 2026 net loss between $(218) mln and $(201) mln

• AeroVironment expects fiscal 2026 non-GAAP EPS between $2.75 and $3.10

Result Drivers

• BLUEHALO ACQUISITION - Higher product and service revenue driven by BlueHalo acquisition contributed to revenue growth

• SPACE UNIT IMPAIRMENT - $151.3 mln goodwill impairment in Space unit after stop-work order on key contract

• GROSS MARGIN PRESSURE - Gross margin percentage declined due to higher service revenue mix and increased amortization and purchase accounting expenses

Company press release: ID:nBw96B1Zra

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 17 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the aerospace & defense peer group is "buy"

• Wall Street's median 12-month price target for AeroVironment Inc is $368.50, about 62.1% above its March 9 closing price of $227.29

• The stock recently traded at 53 times the next 12-month earnings vs. a P/E of 68 three months ago

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