AVAV Stock Skyrockets, On Track For Best Single-Day Gains In Over 2 Years On Q4 Beat — But Wall Street Isn't Happy

• UBS said that while AeroVironment continues to invest in its growth pipeline, it still faces a "bumpy road" ahead.
• Stifel cut its price target to $220 from $315 on AeroVironment, while maintaining a ‘Buy’ rating.
• RBC Capital Markets also reduced its price target to $210 from $250 while reiterating an ‘Outperform’ rating.

Shares of AeroVironment Inc. (AVAV) skyrocketed on Tuesday after the company reported better-than-expected fourth-quarter (Q4) results. AeroVironment shares were on track for their best single-day gains in more than two years.

However, Wall Street is not happy, with analysts at UBS trimming their price target on AeroVironment to $166 from $172, implying a downside potential of nearly 4% from current levels.

AeroVironment shares soared to $178.5 before paring some of the gains in Tuesday morning’s trade. AVAV was among the top trending tickers on Stocktwits.

Why Wall Street Is Not Happy With AVAV

Despite the quarterly beat, analysts remained cautious on AeroVironment's outlook, with several firms trimming their price targets following the results.

UBS said that while AeroVironment continues to invest in its growth pipeline, it still faces a "bumpy road" ahead.

Stifel cut its price target to $220 from $315 on AeroVironment, while maintaining a ‘Buy’ rating.

The firm noted that AeroVironment’s fiscal 2027 guidance was broadly in line with expectations, but it flagged headwinds of approximately 5% each from the canceled SCAR program, the wind-down of Ukraine-related demand, and delays to the U.S. defense budget.

RBC Capital Markets also reduced its price target to $210 from $250 while reiterating an ‘Outperform’ rating. Analyst Ken Herbert said the stronger-than-expected fourth-quarter results should improve confidence heading into fiscal 2027 and described the company's conservative guidance as a net positive, even as he lowered his valuation assumptions.

AVAV CEO Touts Unprecedented Demand

AeroVerinonment CEO Wahid Nawabi told analysts during a post-earnings call that the company is experiencing unprecedented demand for its products, while adding that it is scaling manufacturing to keep up.

“With demand for our solutions continuing to rise, our work over the past year has positioned AV as a stronger, more resilient, and diversified company,” Nawabi added.

Nawabi said AeroVironment believes it is well positioned to benefit from growing demand across its core markets, citing its extensive installed base, decades-long relationships with customers and combat-tested products. He added that the company's ability to rapidly scale manufacturing gives it an edge over many competitors, particularly newer entrants.

AVAV’s Q4 At A Glance

AeroVironment reported Q4 revenue of $641.6 million, up 133% from the year-ago period and ahead of an estimated $559 million, according to Fiscal.ai data. The revenue growth during the quarter was driven by higher product sales and service revenue, including contributions from its acquisitions of BlueHalo and Empirical Systems Aerospace, AVAV said.

The company posted earnings per share of $1.84 during the quarter, compared to Wall Street estimates of $1.47.

AeroVironment guided for fiscal 2027 EPS in the $3.02 to $3.34 range, while stating that it does not expect the year to be positive in terms of free cash flow.

What Retail Traders Think Of AVAV Stock

Retail sentiment on Stocktwits around AeroVironment trended in the ‘extremely bullish’ territory, with message volumes at ‘extremely high’ levels.

AVAV stock is down 30% year-to-date and 41% over the past 12 months. The Vanguard Total Stock Market Index Fund ETF (VTI) is up 21% over the past 12 months, while the Vanguard Small-Cap Index Fund ETF (VB)is up 27%.

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