Why AeroVironment Inc's Stock Skyrocketed 14% in a Quarter
AeroVironment Inc (NASDAQ:AVAV), a leading player in the Aerospace & Defense industry, has seen a significant surge in its stock price over the past quarter. With a current market cap of $2.96 billion and a price of $112.65, the company's stock has gained 8.01% over the past week and 13.53% over the past three months. The GF Value, defined by GuruFocus.com, calculates a stock's intrinsic value using historical multiples, past performance adjustments, and future business estimates. The GF Value for AeroVironment stands at $119.68, indicating that the stock is fairly valued. This is consistent with the GF Value three months ago, which was $111.7, suggesting that the stock was fairly valued then as well.
Unpacking AeroVironment Inc's Business Model
AeroVironment Inc operates under a single business segment, supplying unmanned aircraft systems, tactical missile systems, high-altitude pseudo-satellites, and other related services to government agencies within the United States Department of Defense as well as the United States allied international governments. These systems provide "eyes in the sky" without needing an actual person, or driver, in the sky, aiding in security, surveillance, or sensing operations.
Profitability Analysis of AeroVironment Inc
AeroVironment's Profitability Rank stands at 7/10, indicating a relatively high level of profitability. The company's Operating Margin is 1.20%, better than 36.39% of 294 companies in the same industry. However, the company's ROE and ROA stand at -24.70% and -16.73% respectively, which are lower than industry averages. The ROIC is 0.88%, better than 38.08% of 302 companies in the industry. Over the past 10 years, AeroVironment has been profitable for 8 years, indicating a consistent level of profitability.
Growth Prospects of AeroVironment Inc
The company's Growth Rank is 6/10, indicating a moderate level of growth. The 3-Year Revenue Growth Rate per Share is 12.30%, better than 76.89% of 264 companies in the industry. The 5-Year Revenue Growth Rate per Share is 13.00%, better than 83.33% of 234 companies. The Total Revenue Growth Rate (Future 3Y To 5Y Est) is 16.73%, better than 86.67% of 60 companies, suggesting promising future growth prospects.
Top Holders of AeroVironment Inc Stock
The top three holders of AeroVironment's stock are Baillie Gifford (Trades, Portfolio) with a 3.02% share, Catherine Wood (Trades, Portfolio) with a 2.29% share, and Ken Fisher (Trades, Portfolio) with a 0.61% share. These holdings could have significant implications for the company's stock performance.
Competitive Landscape
AeroVironment faces competition from Moog Inc with a market cap of $3.67 billion, Eve Holding Inc with a market cap of $2.13 billion, and Mercury Systems Inc with a market cap of $2.29 billion. A comparison of AeroVironment's market cap, stock performance, profitability, and growth with these competitors provides a comprehensive view of the company's standing in the Aerospace & Defense industry.
Conclusion
In conclusion, AeroVironment Inc's stock performance, profitability, growth, holders, and competitors all play a crucial role in its overall market standing. The company's consistent profitability, promising growth prospects, and significant holdings by top investors suggest a positive outlook. However, the competitive landscape and the company's lower ROE and ROA compared to industry averages warrant careful consideration. As always, investors are advised to conduct their own comprehensive analysis before making investment decisions.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
