Drone maker AeroVironment advances 35% in early trading on 4Q earnings beat

Shares of drone maker AeroVironment have surged around 35% in premarket trading on Tuesday as of this writing. Investors welcomed the company's latest earnings report after quarterly profit and revenue topped analysts' expectations and its order book climbed 65% over the last year. The company is benefiting from rising global demand for drones, counter-drone systems, and space technologies.

In premarket trading on Tuesday, drone and defense tech supplier AeroVironment has jumped around 35% to $187.50 per share. During Monday's regular session, the stock was up as much as 19% intraday before giving back most of those gains and just 0.8% higher.

In its fiscal-2026 fourth-quarter results, the drone maker reported a 133% year-over-year increase in revenue to $641.6 million, versus the $559.0 million expected by analysts. Net income rose to $63.2 million from $16.7 million a year earlier. Full-year revenue increased 141% to $1.98 billion. Adjusted earnings came in at $1.84 per share, versus the $1.46 per share expected by analysts surveyed by LSEG, CNBC wrote.

AeroVironment is "well positioned to benefit from the rising global demand in drones, counter-drones and space technology," CEO Wahid Nawabi said, as quoted by CNBC.

Bookings for fiscal 2026 increased 125% year over year to $2.7 billion, while the funded backlog rose 65% to $1.2 billion.

In its earnings release, the company said $282 million in revenue came from completed acquisitions, including defense technology developer BlueHalo and aerospace testing company Empirical Systems Aerospace.

AeroVironment expects fiscal-2027 revenue of $2.13-2.23 billion, versus the $2.17 billion forecast by LSEG analysts. The management guides for adjusted earnings per share of $3.02-3.34, versus the LSEG consensus estimate of $3.94.

Despite Tuesday's rally, shares of the drone maker are down 42.5% year to date. The company has faced headwinds following the cancellation of a government contract to supply BADGER phased-array antennas for the SCAR satellite communications program, as well as an accounting error, Barron's reported.

Still, AeroVironment sees significant opportunities ahead as the Pentagon's budget for drone systems next year could exceed $75 billion. "Not only the U.S. Department of War, but all of our allies are behind the eight ball in terms of adoption and deployment," Nawabi told CNBC. "Now we're playing catch-up. Our military is playing catch-up in a very fast pace."

Wall Street is unanimously bullish on AeroVironment. All 14 analysts covering the stock have a "buy" rating. Their average target price is $270.42 per share, implying 94.5% upside from the Monday closing price.