AVAV Outperforms Industry Over the Past Month: Should You Buy the Stock?

Core Insights - AeroVironment, Inc. (AVAV) shares have increased by 65% in the past month, outperforming the Zacks Aerospace-Defense Equipment industry's growth of 8.3% and the broader Zacks Aerospace sector's gain of 6% [1][9] - The company's strong quarterly revenues, strategic partnerships, and notable contract wins have contributed to investor optimism [4][9] Financial Performance - AVAV reported a revenue growth of 140% in its first-quarter fiscal 2026 results, leading to a gross profit margin increase of 17% [4] - The Zacks Consensus Estimate for AVAV's fiscal 2026 sales indicates a year-over-year growth of 145.5%, while fiscal 2027 sales are expected to grow by 15.2% [13] Contracts and Partnerships - AVAV secured a $499 million contract from the U.S. Air Force Research Laboratory for the High-Performance Electromagnetic Spectrum Survivable Materials Advancement program [6] - The company signed a Memorandum of Understanding with Taiwan's National Chung-Shan Institute of Science and Technology to collaborate on autonomous systems [5] Growth Prospects - AeroVironment is well-positioned for steady growth, driven by its expanding role in defense, space, and autonomous technology [7] - The company has a record backlog of $1.1 billion for fiscal 2026, providing strong visibility for future projects and revenues [11] Valuation - AVAV's forward 12-month price-to-earnings (P/E) ratio is 101.93X, which is higher than the industry average of 51.41X, indicating a premium valuation [16]