AeroVironment's stock (AVAV) dropped 5.21% in pre-market trading on Wednesday, following the company's fiscal second-quarter earnings report that fell short of Wall Street expectations. The drone maker reported adjusted earnings per share of 44 cents, significantly below the estimated 78 cents, and cut its full-year earnings forecast.
The earnings miss was attributed to increased non-cash purchase accounting expenses and acquisition-related charges, despite record sales of $472.5 million, which included revenue from the recently acquired BlueHalo. Analysts noted that while sales were strong, the messy earnings figures and reduced guidance spooked investors.
Wall Street remains optimistic about AeroVironment's long-term prospects, with all 16 analysts covering the stock maintaining a "Buy" rating. However, RBC Capital Markets lowered its price target to $375 from $400, reflecting near-term concerns. The stock's decline also comes after an 83% year-to-date rally, suggesting some profit-taking may be at play.
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