AeroVironment, Inc. (NASDAQ:AVAV) just released its quarterly report and things are looking bullish. It was overall a positive result, with revenues beating expectations by 8.7% to hit US$87m. AeroVironment also reported a statutory profit of US$0.42, which was an impressive 27% above what the analysts had forecast. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the current consensus from AeroVironment's five analysts is for revenues of US$404.6m in 2021, which would reflect a meaningful 10% increase on its sales over the past 12 months. Statutory earnings per share are predicted to jump 22% to US$1.76. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$402.6m and earnings per share (EPS) of US$1.90 in 2021. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.
It might be a surprise to learn that the consensus price target was broadly unchanged at US$88.00, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values AeroVironment at US$90.00 per share, while the most bearish prices it at US$86.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
Of course, another way to look at these forecasts is to place them into context against the industry itself. Next year brings more of the same, according to the analysts, with revenue forecast to grow 10%, in line with its 9.0% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 5.7% per year. So although AeroVironment is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for AeroVironment. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$88.00, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for AeroVironment going out to 2023, and you can see them free on our platform here..
And what about risks? Every company has them, and we've spotted 1 warning sign for AeroVironment you should know about.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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