AeroVironment (AVAV) Q2 Earnings Monitor: What Can You Expect?

in EARNINGS/INVESTING IDEAS by

AeroVironment, Inc. (NASDAQGS:AVAV) is scheduled to report Q2 earnings results on December 3, 2019. You can find more information about the conference call here.

The company is expected to report earnings of $0.29/share on revenue of $82.55 million. The consensus earnings per share (EPS) of $0.29/share is based on a poll of 6 analysts and represents a decline of -0.8% over the same quarter last year when the company reported earnings of $0.29/share.

The revenue forecast of $82.55 million based on a poll of 6 analysts implies a year-over-year (YoY) growth of 13.1%. Last year the company reported $72.979 million in revenue for the quarter.

Expected to report EPS decline of -$0/share for Q2, 2019
Metric Expected Prior Year YoY Change
Revenue $82.55 $72.98 13.1%
EPS $0.29 $0.29 -0.8%

Earnings Call Trends

Historically, management has exceeded analyst expectations 7 out of the last 8 tracked quarters, and missed expectations 1 quarter. What are your expectations from AeroVironment for earnings this quarter? Let us know in the comments!

Analyst Expected vs Reported EPS
Quarter Expected Reported Surprise Result
Q1, 2020 $0.35 $0.74 111.4% Beat
Q4, 2019 $0.22 $0.25 15.0% Beat
Q3, 2019 $0.16 $0.35 118.8% Beat
Q2, 2019 $0.17 $0.29 72.0% Beat
Q1, 2019 $0.32 $0.59 84.4% Beat
Q4, 2018 $0.52 $0.86 64.9% Beat
Q3, 2018 $0.11 $0.10 -12.2% Missed
Q2, 2018 -$0.11 $0.32 NM Beat

One question we always consider here at the Bankers’ Tribune is how important are earnings reports to AeroVironment’s stock price performance? It’s more important for some companies than for others.

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending July 27, 2019, the stock price reacted by increasing by 7.4%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
2019-09-04 $51.51 $55.33 7.4% Increase
2019-06-25 $61.82 $55.89 -9.6% Decline
2019-03-05 $76.97 $83.95 9.1% Increase
2018-11-29 $91.88 $76.60 -16.6% Decline

Fundamentals And Technical Analysis

AeroVironment is currently trading at $63.75/share, up 3.9% for the day. The company is trading at approximately 61.6% of its 52-week high of $103.46/share. The company’s stock price is up 15.2% since the last earnings report and up 3.3% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 55.64 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.

The current share price implies a price-to-earnings (P/E) multiple of 37.7x and a forward P/E multiple of 36.8x.

AeroVironment’s current share price also implies a price-to-book (P/B) multiple of 3.0x. The following table summarizes some other key fundamental ratios:

Data as of December 3, 2019
Metric Value
Last Fiscal Period FY2020.Q1
Period End Date July 27, 2019
Stock Price (Current) $63.75
P/E Ratio 37.7x
P/E Ratio (Fwd) 36.8x
PEG Ratio 2.1
Total Debt to Capital (%) 0.7%
Levered Free Cash Flow $14.571 million
Enterprise Value / EBITDA 22.9x

Source: Finbox

Company Profile: AeroVironment, Inc.

AeroVironment, Inc. is a small-cap stock with a market capitalization of $1.514 billion and a total enterprise value of $1.224 billion. The company operates in the Industrials sector and the Aerospace & Defense industry.

AeroVironment, Inc. designs, develops, produces, supports, and operates a portfolio of products and services for government agencies and businesses. The company offers unmanned aircraft systems (UAS) and related services primarily to organizations within the U.S. Department of Defense and to international allied governments; and tactical missile systems and related services to organizations within the U.S. Government. It also provides small UAS products, including spare equipment, alternative payload modules, batteries, chargers, repair services, and customer support. In addition, the company develops high altitude pseudo-satellite systems for a commercial customer based in Japan.

The company was founded in 1971 and is headquartered in Simi Valley, California.

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