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AeroVironment (AVAV) Outpaces Stock Market Gains: What You Should Know

In the latest trading session, AeroVironment (AVAV) closed at $92.69, marking a +1.81% move from the previous day. This change outpaced the S&P 500's 1.42% gain on the day. Meanwhile, the Dow gained 1.15%, and the Nasdaq, a tech-heavy index, added 2.29%.

Heading into today, shares of the maker of unmanned aircrafts had lost 18.31% over the past month, lagging the Aerospace sector's loss of 0.6% and the S&P 500's loss of 5.36% in that time.

Wall Street will be looking for positivity from AVAV as it approaches its next earnings report date. This is expected to be December 4, 2018. On that day, AVAV is projected to report earnings of $0.16 per share, which would represent a year-over-year decline of 44.83%. Meanwhile, our latest consensus estimate is calling for revenue of $74.83 million, up 1.35% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.36 per share and revenue of $307.72 million. These totals would mark changes of +25.93% and +2.95%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for AVAV. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. AVAV is holding a Zacks Rank of #1 (Strong Buy) right now.

In terms of valuation, AVAV is currently trading at a Forward P/E ratio of 67.19. This valuation marks a premium compared to its industry's average Forward P/E of 19.79.

Investors should also note that AVAV has a PEG ratio of 3.36 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Aerospace - Defense Equipment industry currently had an average PEG ratio of 2.16 as of yesterday's close.

The Aerospace - Defense Equipment industry is part of the Aerospace sector. This industry currently has a Zacks Industry Rank of 67, which puts it in the top 26% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow AVAV in the coming trading sessions, be sure to utilize Zacks.com.

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