AeroVironment Inc. (NASDAQ:AVAV) shares tumbled more than 9% in Wednesday’s premarket trading after the defense technology company reported quarterly earnings and revenue that missed Wall Street expectations and lowered its fiscal 2026 profit outlook.
Earnings, Revenue Fall Short of Estimates
AeroVironment reported third-quarter fiscal 2026 earnings of 64 cents per share, missing the consensus estimate of 69 cents per share.
Quarterly revenue totaled $408.05 million, also below the Street estimate of $475.63 million, representing a 14.21% shortfall.
Despite the miss, revenue for the third quarter of fiscal 2026 rose 143% year over year, driven by higher product sales and increased service revenue.
Fiscal 2026 Guidance Reduced
The company also lowered its fiscal 2026 adjusted earnings outlook, projecting earnings of $2.75 to $3.10 per share. The new forecast is below both its prior guidance of $3.40 to $3.55 per share and the analyst estimate of $3.31 per share.
CEO Points to Strong Demand
“While our third quarter results were impacted by revenue timing and adjustments in our Space business, demand for our unique solutions remains robust,” said Wahid Nawabi, AeroVironment chairman, president and CEO.
“Strong order flow and growth in funded backlog during the quarter are setting the stage for record fourth quarter revenue and a solid start to fiscal year 2027,” Nawabi commented on Tuesday.
As of January 31, 2026, AeroVironment reported a funded backlog of $1.1 billion, up from $726.6 million as of April 30, 2025, reflecting rising demand for the company’s defense and aerospace technologies.
Impairment Charges
The company recorded a $151.3 million goodwill impairment in the third quarter of fiscal 2026 after receiving a January 2026 stop-work order related to its Other Transaction Agreement to deliver BADGER phased array antenna systems for the Space Force’s Satellite Communication Augmentation Resource (SCAR) program.
Management determined the order was a triggering event, indicating that the carrying value of the Space reporting unit exceeded its fair value.
Following the order, the company revised its long-term cash flow projections for the Space unit to reflect lower expected revenue tied to the paused program.
The updated outlook also factors in higher anticipated research and development spending and capital investments required to commercialize the product.
Technical Analysis
The stock is currently trading 18.6% below its 20-day simple moving average (SMA) and 31.7% below its 100-day SMA, demonstrating significant weakness.
Shares have increased 78.69% over the past 12 months and are currently positioned closer to their 52-week lows than highs.
The RSI is at 40.00, which is considered neutral territory. Meanwhile, MACD is at -15.6354, below its signal line at -14.2451, indicating bearish pressure on the stock.
The combination of neutral RSI and bearish MACD suggests mixed momentum.
- Key Resistance: $202.50
- Key Support: $196.00
Analyst Consensus & Recent Actions: The stock carries a Buy Rating with an average price target of $352.78. Recent analyst moves include:
- Canaccord Genuity: Buy (Lowers Target to $330.00) (March 4)
- RBC Capital: Outperform (Lowers Target to $325.00) (March 3)
- Baird: Outperform (Lowers Target to $260.00) (March 3)
Benzinga Edge Scorecard
Below is the Benzinga Edge scorecard for AeroVironment, highlighting its strengths and weaknesses compared to the broader market:
- Momentum: Bullish (Score: 86.09) — Stock is outperforming the broader market.
The Verdict: AeroVironment’s Benzinga Edge signal reveals a classic ‘High-Flyer’ setup. While the Momentum (86.09) confirms the strong trend, the extremely low Value score warns that the stock is priced for perfection—investors should ride the trend but use tight stop-losses.
Top ETF Exposure
- SPDR S&P Aerospace & Defense ETF (NYSE:XAR): 4.49% Weight
- ARK Autonomous Technology & Robotics ETF (BATS:ARKQ): 3.99% Weight
- ARK Space & Defense Innovation ETF (NASDAQ:ARKX): 6.80% Weight
AVAV Price Action: AeroVironment shares were down 9.30% at $200.97 during premarket trading on Wednesday, according to Benzinga Pro data.
Photo by Piotr Swat via Shutterstock
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