Why AeroVironment Stock Dropped Today

MrDecoder · 2026-03-11T19:15:50+00:00

AeroVironment's stock fell 5% after missing earnings expectations, reporting $0.64 per share compared to the forecasted $0.72. Despite a 143% sales growth year-over-year, the company had a GAAP loss of $3.15 per share and negative cash flow, leading to a cautious investment outlook.

MrDecoder

2026-03-11 19:15:50

Abstract generation in progress

AeroVironment (AVAV 7.16%) stock slipped 5% through 11:05 a.m. ET Wednesday after missing on earnings last night.

Analysts forecast the maker of military drones would earn $0.72 per share on sales of $483.9 million in its fiscal Q3 2026. In fact, AeroVironment earned only $0.64 per share, and sales fell far short of expectations: $408 million.

Image source: Getty Images.

AeroVironment Q3 earnings

On the surface, this seems pretty bad news – but it wasn’t _all _bad. Despite “missing” on sales, AeroVironment nonetheless managed to grow its sales 143% year over year.

Less encouraging is the news on profits. AeroVironment not only missed on earnings in Q3. And what it did “earn” was only pro forma profit. When calculated under generally accepted accounting principles (GAAP), AV’s result for Q3 was actually a net loss of $3.15 per share.

Year to date, AV has racked up losses of $241 million, and its free cash flow is negative $220 million.

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NASDAQ: AVAV

AeroVironment

Today’s Change

(-7.16%) $-15.87

Current Price

$205.70

Key Data Points

Market Cap

$11B

Day’s Range

$199.37 - $213.56

52wk Range

$102.25 - $417.86

Volume

2.8M

Avg Vol

1.7M

Gross Margin

21.66%

Is AeroVironment stock a sell?

So sales are surging, but profits are nowhere to be seen. How should investors react to this?

On the one hand, continued sales growth seems certain. Management noted it’s got a book-to-bill ratio of 1.6 so far this year (which foreshadows more strong sales growth ahead). Guidance is for about $1.9 billion in total sales through the end of this fiscal year, more than twice AV’s total sales last year.

There are two problems with this: First, AV’s entire guidance range is below analysts’ year-end forecasts. Second, it’s not enough revenue to turn AV profitable. GAAP losses for the year are still forecast to be at least $4.10 per share, and potentially as bad as $4.44 per share.

To me, AV stock looks like a sell.

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