Why AeroVironment Stock Is Soaring Today

AeroVironment (NASDAQ: AVAV) topped quarterly expectations and closed out its fiscal year with its highest total bookings on record. Investors are pleased, sending shares of the drone manufacturer up 26% as of 10:30 a.m. ET.

Image source: AeroVironment.

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Easily surpassing expectations

AeroVironment is a manufacturer of small-to-midsized military-grade unmanned aerial vehicles (UAVs). The company's products have demonstrated their value on the battlefield in Ukraine, attracting a lot of interest among investors.

The latest results appear to justify that interest. AeroVironment earned $1.61 per share in its fiscal fourth quarter ending April 30 on revenue of $275.1 million, easily topping Wall Street's expectation for $1.38 in earnings on sales of $242 million.

"AeroVironment finished out fiscal year 2025 with a remarkable fourth quarter, which included record revenue, significantly higher profits, and a robust backlog nearly double that from fiscal year 2024," CEO Wahid Nawabi said in a statement.

The company closed the year with $1.2 billion in total bookings, creating a solid pipeline of future revenue.

Is AeroVironment stock a buy?

In the past few years, AeroVironment has gone from a company with a promising suite of technologies to a battle-tested contractor. The company is poised to broaden the scale of its offerings in the years to come, both with larger, more complex UAVs and, thanks to the acquisition of BlueHalo, new space and sea-based systems.

If there is a knock on the stock today, it is the relatively rich valuation for a defense contractor. AeroVironment trades at 63 times expected earnings, well above the 17 to 20 times range of more established contractors, including General Dynamics, Northrop Grumman, and Lockheed Martin. But AeroVironment is starting from a smaller base and has more opportunities to grow than those larger rivals in the years to come.

For investors who can handle the potential volatility that comes with higher valuations, AeroVironment looks like a winner in the defense-tech sector.

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Lou Whiteman has positions in General Dynamics and Lockheed Martin. The Motley Fool has positions in and recommends AeroVironment. The Motley Fool recommends Lockheed Martin. The Motley Fool has a disclosure policy.