AVAV - AeroVironment: Here's Why I'm Downgrading To Hold

2024-03-05 15:53:22 ET

Summary

• AeroVironment's stock has performed well, gaining 84% compared to a 22.7% return for the broader markets.
• The company's recent quarterly results show strong demand for unmanned and loitering ammunition solutions, with average revenues growing significantly.
• AeroVironment has provided guidance for fiscal 2024, indicating 30% revenue growth and a strong fourth quarter with sales exceeding $180 million.

In May 2023, I started coverage for AeroVironment ( AVAV ) stock after the company had just been eliminated from the FTUAS (Future Tactical Unmanned Aerial System) program. At the time, I saw the elimination as a risk to sustained growth for the company and combined with the high EV/EBITDA relative to peers, I put a hold rating on AVAV stock . The stock, however, has performed well, gaining 84% vs. a 22.7% return for the broader markets....

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