AeroVironment Stock Drops After Earnings. Why Record Sales Aren’t Helping the Drone Maker.

AeroVironment Switchblade 600 Loitering Munition System. Through Tuesday trading, AeroVironment shares were up 83% year to date. (Courtesy AeroVironment)

Key Points

• AeroVironment reported record sales of $472.5 million, a 151% increase year over year, including BlueHalo acquisition revenue.
• Adjusted earnings per share were 44 cents, missing analyst estimates of 78 cents, despite sales exceeding projections.
• The company’s stock fell, even as all 16 analysts rate shares a “Buy” with an average target of $394.

Military drone technology maker AeroVironment reported record—but messy—numbers. Its stock, which has been incredibly strong in 2025, fell after results were released.

For the fiscal second quarter ended Nov. 1, AeroVironment announced record sales of $472.5 million, up 151% year over year. That includes revenue for the recently acquired BlueHalo. Comparable sales were up an impressive 21% year over year. Wall Street was looking for revenue of $469 million.

Sales beat estimates. Earnings per share didn’t appear to exceed analyst estimates, but there was a bevy of charges related to the BlueHalo acquisition. Adjusted earnings per share were about 44 cents. Wall Street was looking for 78 cents.

Analysts knew charges, such as amortization of acquisition-related intangibles, were coming. Unadjusted earnings per share were a loss of 34 cents, seven cents better than the Street’s projections.

Guidance is close to Wall Street’s estimates. For the full year, AeroVironment expects revenue of between $1.95 billion and $2 billion and adjusted earnings before interest, taxes, depreciation, and amortization, or Ebitda, of between $300 and $320 million. Wall Street projects revenue of $2 billion and Ebitda of $315 million.

Shares fell after earnings were reported Tuesday evening. AeroVironment stock dropped 12.9% on Wednesday, closing at $245.25, while the S&P 500 and Dow Jones Industrial Average gained 0.7% and 1.1%, respectively.

Profit-taking might be part of the reaction. AeroVironment’s stock has been strong, boosted by growing demand for drone technology. Through Tuesday trading, shares were up 83% this year.

Wall Street seems fine with the results. Cantor analyst Colin Canfield expects underperformance to be “short-lived,” saying in a Tuesday report that investors will soon be looking at 2026 catalysts, including more government spending on military drones.

He rates shares Buy and has a $315 price target for the stock. William Blair analyst Louie DiPalma rates shares Buy and doesn’t have a price target for shares. He wrote on Wednesday that AeroVironment’s commentary about its business pipeline was “bullish.”

All 16 analysts covering the stock rate shares Buy, according to FactSet. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. The average analyst price target for AeroVironment stock is about $394 a share.

Write to Al Root at allen.root@dowjones.com