Shares of AeroVironment (NASDAQ: AVAV) are falling on Wednesday. The corporate’s inventory had misplaced 4.4% as of two:05 p.m. ET however was down as a lot as 22.4% earlier within the day. The drop comes because the S&P 500 gained 0.7% and the Nasdaq composite gained 0.9%.
The protection contractor reported earnings yesterday that failed to fulfill Wall Avenue’s expectations.
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The numbers weren’t nice
For its fourth quarter, AeroVironment delivered earnings per share (EPS) of $0.30 on gross sales of $167.6 million, with the latter down 10.2% 12 months over 12 months. Each figures had been effectively off the mark for analyst estimates, with EPS lacking by greater than 50%.
Its steering was additionally a disappointment. AeroVironment lowered its full-year income steering to $787.5 million, a 2.2% lower from earlier steering. The corporate additionally lowered its full-year adjusted EPS steering by 9.3%.
World occasions aren’t serving to
AeroVironment focuses on unmanned plane and its merchandise have been closely utilized by Ukraine after it was invaded by Russia. The Trump administration has reversed course in the US’ assist of the nation, halting army assist. The corporate stated its steering was impacted “most importantly [by] gross sales to Ukraine.”
The corporate, which has operations in Southern California, stated it was additionally impacted by the current wildfires.
Valuation troubles
AeroVironment’s present monetary woes additionally reveal deeper points with its valuation. The corporate’s present price-to-earnings ratio (P/E) of 83.5 is considerably increased than most of its defense contracting competition. RTX, as an illustration, has a P/E of 36.3. I’d look elsewhere.
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Johnny Rice has no place in any of the shares talked about. The Motley Idiot has positions in and recommends AeroVironment. The Motley Idiot recommends RTX. The Motley Idiot has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the writer and don’t essentially mirror these of Nasdaq, Inc.
