A week ago, AeroVironment, Inc. (NASDAQ:AVAV) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. AeroVironment delivered a significant beat to revenue and earnings per share (EPS) expectations, hitting US$152m-16% above indicated-andUS$0.84-350% above forecasts- respectively The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Check out our latest analysis for AeroVironment
NasdaqGS:AVAV Earnings and Revenue Growth September 8th 2023
Taking into account the latest results, the most recent consensus for AeroVironment from six analysts is for revenues of US$672.8m in 2024. If met, it would imply a meaningful 15% increase on its revenue over the past 12 months. Earnings are expected to improve, with AeroVironment forecast to report a statutory profit of US$2.34 per share. In the lead-up to this report, the analysts had been modelling revenues of US$660.5m and earnings per share (EPS) of US$2.40 in 2024. 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.
Despite cutting their earnings forecasts,the analysts have lifted their price target 6.7% to US$120, suggesting that these impacts are not expected to weigh on the stock's value in the long term. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on AeroVironment, with the most bullish analyst valuing it at US$130 and the most bearish at US$108 per share. 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.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that AeroVironment's rate of growth is expected to accelerate meaningfully, with the forecast 21% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 12% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.9% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that AeroVironment is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for AeroVironment going out to 2026, and you can see them free on our platform here..
It is also worth noting that we have found 1 warning sign for AeroVironment that you need to take into consideration.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
