Is AeroVironment Inc a Buy After Its Latest Earnings Report?

It's hard to avoid the "soaring like a small aircraft" metaphors when writing about AeroVironment's (Nasdaq:AVAV) fiscal 2026 fourth-quarter and full-year results. These, plus the investor reaction to them, were very impressive, and in after-hours trading as of early Tuesday morning, the stock of the drone and defense systems specialist was up by more than 20%.

Almost needless to say, the company crushed analyst estimates, thanks to monster growth in key fundamentals. Let's dig into how it performed so well.

Image source: Getty Images.

Lifting off, and how

AeroVironment published those financials just after market close on Monday. They revealed that the company's quarterly revenue doubled and then some, cruising to $641.6 million from the same period of 2025's $275 million. Breaking that down further, product sales leaped to just under $499 million from a bit over $242 million, while contract services more than quadrupled to $142.7 million.

As for net income under generally accepted accounting principles (GAAP), that also saw a surge. AeroVironment netted over $63 million in profit, well higher than the year-ago result of under $17 million. On a non-GAAP (adjusted) and per-share basis, profitability rose to $1.84 from $1.61.

Those headline numbers significantly exceeded the consensus analyst estimates. On average, pundits tracking AeroVironment's stock were modeling slightly over $557 million in revenue and only $1.48 per share in non-GAAP (adjusted) profitability.

While the company posted encouraging organic growth from its legacy businesses, it was helped to no small degree by recent acquisitions.

The company wrote in its earnings release that next-generation defense company BlueHalo and unmanned aircraft systems (UAS) and advanced air mobility (AAM) platform specialist Empirical Systems Aerospace (ESAero) were together responsible for over $282 million in revenue during the quarter.

Looking past the key fundamentals a little, another impressive figure AeroVironment published was its backlog. As of the end of April, this had ballooned to $1.2 billion from under $727 million at the same point in 2025.

AeroVironment defines backlog as "remaining performance obligations under firm orders for which funding is currently appropriated to us under a customer contract," so this is basically revenue already booked that only has to land in the company's coffers to count as that line item. Much of this comes from the U.S. Army, as reliable a paying customer as there is in this country.

Management also proffered guidance for the entirety of its new fiscal year (2027). It believes that revenue will hover between nearly $2.13 billion and just under $2.23 billion, and adjusted net income will be $3.02 to $3.34 per share.

That top-line range compares favorably to the just under $2 billion in revenue for all of fiscal 2026, while the $3.31 per share in adjusted net income the company earned last fiscal year is within the provided bottom-line range. Profitability is sure to be impacted by the company's efforts to build out production infrastructure and international sales capacity to capture more of its hot market.

Multiple flight paths

I'm not seeing much to dislike or worry about in AeroVironment's results, even though the company's guidance suggests a cooling off from the torpid performance of fiscal 2026. I feel management is wisely conducting a "make hay while the sun shines" strategy with its busy build-outs, and the company operates at the center of current aerial technology -- and very effectively, at that.

I'm excited to see where AeroVironment will go next, and I'd even bet that those guidance numbers will prove to be conservative. There's plenty of organic growth to be had and small, clever peers to acquire to further bulk up the company.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AeroVironment. The Motley Fool has a disclosure policy.