UAV - AeroVironment plunges after U.S. Army drops from drone competition

2023-05-25 19:27:16 ET

AeroVironment ( NASDAQ: AVAV ) closed -15.5% on Thursday after its Jump 20 drone was not selected by the U.S. Army to proceed further within the Future Tactical Unmanned Aircraft System program.

In 2021, the Army opened competition for a permanent drone system and, earlier this year, the service selected five companies, including AeroVironment ( AVAV ), to build prototypes, but late Wednesday the Army said it was awarding contracts to move into the design phase to Griffon Aerospace ( GFF ), Northrop Grumman ( NOC ), Sierra Nevada and Textron Systems ( TXT ) - all of the competitors except AeroVironment.

Some investors had believed AeroVironment ( AVAV ) was a strong contender because the Army had awarded $8M to provide the Jump 20 system as an interim Shadow replacement for one brigade, and the company's drone also is one the systems that has been sent to Ukraine.

AeroVironment ( AVAV ) said it had a strong close to its FY 2023 ended April 30 despite the setback, which it said does not have a material impact on its near-term outlook and remains poised for at least 15% top-line growth in FY 2024.

More on AeroVironment:

• Financial and valuation comparison to sector peers
• Analysis: AeroVironment: Drone Maker Stock Crashes Despite War Tailwind
• Stock price return: Up 9.5% YTD, up 5.5% in the past 12 months

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