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AeroVironment (AVAV) Dips More Than Broader Markets: What You Should Know

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AeroVironment (AVAV) closed at $52.78 in the latest trading session, marking a -0.51% move from the prior day. This change lagged the S&P 500's daily loss of 0.05%. At the same time, the Dow added 0.19%, and the tech-heavy Nasdaq lost 0.36%.

Coming into today, shares of the maker of unmanned aircrafts had lost 3.63% in the past month. In that same time, the Aerospace sector gained 0.53%, while the S&P 500 lost 1.58%.

Wall Street will be looking for positivity from AVAV as it approaches its next earnings report date. This is expected to be September 4, 2019. The company is expected to report EPS of $0.35, down 40.68% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $85.25 million, up 9.24% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.53 per share and revenue of $359.58 million, which would represent changes of -12.07% and +14.42%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for AVAV. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. AVAV currently has a Zacks Rank of #3 (Hold).

Digging into valuation, AVAV currently has a Forward P/E ratio of 34.67. Its industry sports an average Forward P/E of 22.91, so we one might conclude that AVAV is trading at a premium comparatively.

It is also worth noting that AVAV currently has a PEG ratio of 1.39. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Aerospace - Defense Equipment was holding an average PEG ratio of 2.09 at yesterday's closing price.

The Aerospace - Defense Equipment industry is part of the Aerospace sector. This group has a Zacks Industry Rank of 79, putting it in the top 31% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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