Why AeroVironment Stock Skyrocketed Today
Key Points
Demand for drones is booming.
AeroVironment is a key supplier to the U.S. military and its allies.
- 10 stocks we like better than AeroVironment ›
Shares of AeroVironment (NASDAQ: AVAV) surged on Tuesday after the drone specialist delivered strong gains in revenue and earnings.
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Impressive sales growth
AeroVironment's revenue soared 133% year over year to $641.6 million in its fiscal fourth quarter, which ended on April 30.
The drone maker's growth was boosted by its recent acquisitions of BlueHalo and Empirical Systems Aerospace, which together added $282.3 million in sales.
The performance of AeroVironment's autonomous systems division was notably strong, with revenue rising to 79% to $492.4 million.
"Fiscal 2026 marked a transformational year for AV, which included the completion of our largest acquisition, meaningful investments toward diversifying our portfolio in critical areas aligned to our customers' highest priorities, and the strongest financial performance in our history," CEO Wahid Nawabi said.
All told, AeroVironment's earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 127% to $140.1 million.
A long runway for further expansion
With conflicts in Ukraine and the Middle East proving their effectiveness, demand for drones is rising across the world. The U.S. military intends to spend $75 billion on drones and related technologies in 2027 alone.
These trends should fuel AeroVironment's growth in the coming years. The company's backlog of orders stood at $1.2 billion as of April 30, representing year-over-year growth of 65%. For fiscal 2027, management projects revenue of roughly $2.2 billion and adjusted earnings per share of $3.02 to $3.34.
"AV is well-positioned to capture the rising global demand across lethal and non-lethal drones, counter-UAS [unmanned aerial systems], space and advanced technologies, and deliver long-term shareholder value," Nawabi said.
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Joe Tenebruso 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.
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