NEW YORK — AeroVironment (AVAV) shares dropped 2.4 percent to $123.08, underperforming the broader market as the S&P 500 declined 0.51 percent and the Nasdaq fell 1.07 percent.
The stock has retreated 10.45 percent over the past month, lagging the Aerospace sector's 2.1 percent gain. The underperformance highlights investor skepticism about the company's current valuation.
AeroVironment trades at a forward P/E of 38.65, a significant premium to the Aerospace-Defense Equipment industry average of 29.23. That valuation cushion is now under pressure as the company prepares to report quarterly results.
Analysts project AVAV will report earnings of $0.46 per share, up 4.55 percent year-over-year. Revenue is expected to reach $504.68 million, a 6.81 percent increase. For the full fiscal year, consensus estimates call for $3.26 in EPS—down 1.51 percent from the prior year—and $2.21 billion in revenue, up 11.67 percent.
The PEG ratio of 1.98 matches the industry average, suggesting the premium valuation is not fully justified by growth expectations. Zacks has assigned AVAV a #3 (Hold) rating, with EPS estimates revised up only 0.37 percent over the past month. The Aerospace-Defense Equipment industry ranks 79th among over 250 industries tracked by Zacks, placing it in the top third for relative strength.
