AeroVironment Stock Drops After Earnings. Why Record Sales Aren’t Helping the Drone Maker.

Core Viewpoint - AeroVironment reported record sales for the fiscal second quarter, driven by strong demand for drone technology and the recent acquisition of BlueHalo, although earnings per share fell short of analyst expectations due to acquisition-related charges [1][2]. Financial Performance - AeroVironment achieved sales of $472.5 million, a 151% increase year over year, with comparable sales up 21% [1]. - Adjusted earnings per share were approximately 44 cents, while Wall Street expected 78 cents; unadjusted earnings per share showed a loss of 34 cents, which was better than the projected loss [2]. - For the full year, the company anticipates revenue between $1.95 billion and $2 billion and adjusted EBITDA of $300 to $320 million, aligning closely with Wall Street's projections [3]. Market Reaction - Following the earnings report, AeroVironment's stock fell by 8.4% to $257.92, contrasting with slight gains in the S&P 500 and Dow Jones Industrial Average [3]. - The stock has seen an 83% increase this year, indicating strong market performance prior to the earnings report [4]. Analyst Ratings - All 16 analysts covering AeroVironment rate the stock as Buy, with an average price target of approximately $394 per share [5]. - Analysts express optimism about the company's business pipeline and future catalysts, particularly regarding increased government spending on military drones [4][5].