AeroVironment's (AVAV) stock plunged 8.95% during intraday trading on Wednesday following its fiscal second-quarter earnings report, which fell short of Wall Street expectations. The drone maker reported adjusted earnings per share of 44 cents, significantly below the estimated 78 cents, and revised its full-year earnings guidance downward.
The earnings miss was attributed to increased non-cash purchase accounting expenses and acquisition-related charges tied to its BlueHalo deal. Despite record sales of $472.5 million (up 151% YoY), investors reacted negatively to the profitability concerns. RBC Capital Markets lowered its price target to $375 from $400, citing near-term headwinds, though all 16 analysts covering the stock maintain "Buy" ratings.
The drop also reflects profit-taking after AVAV's 83% year-to-date rally. Analysts, including Cantor Fitzgerald's Colin Canfield, expect the weakness to be temporary, citing 2026 catalysts like increased military drone spending.
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