AeroVironment announced the United States Army exercised the first of three options under the sole source Flight Control Systems, or FCS, domain of the Army's multi-year small UAS contract on April 28. AeroVironment said in a release, "The value of the initial contract option is $21,058,643 and includes avionics and data link upgrade packages to modify radio frequencies employed by the Army's existing fleet of Raven tactical UAS, the largest fleet of Raven systems in the world. Delivery will take place over a two-year period. The Army exercised the option under the FCS domain awarded to AeroVironment by the Army in June 2019. FCS is one of six domains comprising the Army's existing five-year Indefinite Delivery, Indefinite Quantity SUAS contract, and has a potential value of up to $55 million."
Stifel analyst Joseph DeNardi upgraded AeroVironment to Buy from Hold with a price target of $90, up from $55. The company's initial fiscal 2021 guidance came in ahead of expectations as it included an unspecified degree of headwind related to COVID-19, DeNardi tells investors in a research note. AeroVironment remains in a favorable position given "strong demand for its existing portfolio and a full pipeline of new capabilities," says the analyst.
Baird analyst Peter Arment raised the firm's price target on AeroVironment to $86 from $71 and keeps an Outperform rating on the shares. The analyst noted its Q4 top and bottom line beat and its newly established guidance for 2021. He also noted the company won a large one-year funded Army contract to procure the Switchblade Weapon System in April. His new target reflects continued execution on major contracts driving growth through 2023.
Canaccord analyst Ken Herbert raised the firm's price target on AeroVironment to $84 from $75 and keeps a Buy rating on the shares. The analyst continues to believe revenue growth will be the key factor for sentiment and he believes industry fundamentals remain favorable.
Piper Sandler analyst Troy Jensen raised the firm's price target on AeroVironment to $93 from $76 and keeps an Overweight rating on the shares saying the company's April quarter results came in well above consensus estimates. The analyst continues to be "excited" about AeroVironment's growth opportunities. The pipeline for fiscal 2021 "appears robust" and HAPS continues to make good progress, Jensen tells investors in a research note. He believes AeroVironment deserves a higher multiple due to "better than expected profitability and high revenue visibility."
Reports Q4 revenue $135.2M, consensus $123.62M. "Our team delivered outstanding results in our fourth quarter and full fiscal year 2020. We established new records for highest quarterly revenue, highest fiscal year revenue, and highest funded backlog for the full fiscal year 2020. With continued focus on our business strategy, coupled with excellent execution by our committed and talented team, we delivered our third consecutive year of profitable, double-digit topline growth," said Wahid Nawabi, AeroVironment president and chief executive officer. "Strong growth in small unmanned aircraft systems revenue reflects continued global demand for our market leading UAS solutions, while significant progress in tactical missile systems and HAPS advances our strategy for long-term value creation."
Pre-earnings options volume in AeroVironment is 2.8x normal with puts leading calls 5:3. Implied volatility suggests the market is anticipating a move near 13.3%, or $9.56, after results are released. Median move over the past eight quarters is 9.1%.