Breaking Down AeroVironment, Inc. (AVAV) Financial Health: Key Insights for Investors

Are you keeping a close watch on AeroVironment, Inc. (AVAV) and wondering about its financial stability? Did you know that in fiscal year 2024, the company reported a record revenue of $716.7 million, a 33% increase year-over-year? But how does this translate into overall financial health? What about net income, which stood at $60.0 million for the same period? And with revenue projections between $790 million and $820 million for fiscal year 2025, is the company on a sustainable growth trajectory? Let's delve deeper into AeroVironment's financial figures to uncover key insights for investors.

AeroVironment, Inc. (AVAV) Revenue Analysis

AeroVironment, Inc. (AVAV) generates revenue primarily from the design, development, production, support, and operation of unmanned aircraft systems (UAS), tactical missile systems (TMS), high-altitude pseudo-satellites (HAPS), and related services. These offerings cater to various sectors, including government, defense, commercial, and international markets.

AeroVironment's revenue streams can be broken down as follows:

• Products: This includes the sale of UAS, TMS, HAPS, and their components.
• Services: This encompasses services such as training, support, maintenance, and operation of the systems.
• Geographic Regions: Revenue is generated from North America, Europe, and other international markets.

Analyzing year-over-year revenue growth provides insights into AeroVironment's performance and market position. For example, the company's total revenue for fiscal year 2024 was $624.4 million, an increase of 34% compared to 2023. This growth was primarily driven by increased sales of UAS and TMS.

Here's a breakdown of revenue by segment for fiscal year 2024:

Significant changes in revenue streams can occur due to various factors such as:

• New product launches: Introduction of innovative systems can drive revenue growth.
• Government contracts: Securing large defense contracts can significantly boost revenue.
• Acquisitions: Acquiring complementary businesses can expand product offerings and market reach.
• Economic conditions: Changes in global economic conditions and defense spending can impact revenue.

For instance, AeroVironment’s acquisition of Tomahawk Robotics in 2024 has bolstered its capabilities in advanced robotic control systems, potentially opening up new revenue streams and market opportunities.

Further insights into AeroVironment, Inc.'s financial health can be found at: Breaking Down AeroVironment, Inc. (AVAV) Financial Health: Key Insights for Investors

AeroVironment, Inc. (AVAV) Profitability Metrics

Assessing AeroVironment, Inc.'s (AVAV) financial health requires a close examination of its profitability metrics. These metrics provide insights into the company's ability to generate earnings relative to its revenue, assets, and equity. Key indicators include gross profit, operating profit, and net profit margins, which reveal different aspects of the company's efficiency and profitability.

Gross profit margin indicates the percentage of revenue remaining after deducting the cost of goods sold (COGS). For AeroVironment, monitoring the trend in gross margin helps to understand how efficiently the company manages its production costs and pricing strategies. A rising gross margin typically suggests improved operational efficiency or stronger pricing power. The gross profit for fiscal year 2024 was $241.9 million, and the gross margin was 37%.

Operating profit margin, on the other hand, reflects the percentage of revenue remaining after deducting both COGS and operating expenses. This metric provides a clearer picture of the company's profitability from its core business operations, excluding interest and taxes. Analyzing AeroVironment's operating margin trends can highlight the effectiveness of its cost management and operational strategies. AeroVironment's operating income for fiscal year 2024 was $33.4 million, resulting in an operating margin of approximately 5%.

Net profit margin represents the percentage of revenue that remains as net income after deducting all expenses, including COGS, operating expenses, interest, and taxes. This is the bottom-line profitability metric that indicates how much profit the company generates for each dollar of revenue. Tracking AeroVironment's net profit margin is crucial for assessing its overall financial performance and ability to deliver returns to shareholders. In fiscal year 2024, AeroVironment reported a net income of $31.4 million, translating to a net profit margin of about 4.8%.

Here's a summary of AeroVironment's profitability metrics based on the 2024 fiscal year:

When evaluating AeroVironment's profitability, it's essential to compare its ratios with industry averages to benchmark its performance against its peers. This comparison provides valuable context for understanding whether the company's profitability is in line with industry standards or if there are areas where it outperforms or underperforms. Industry-specific factors and market conditions can significantly influence these comparisons. Furthermore, analyzing operational efficiency, such as cost management and gross margin trends, offers deeper insights into the sustainability and potential for improvement in AeroVironment's profitability.

For more insights into AeroVironment, Inc. (AVAV) and its investors, check out: Exploring AeroVironment, Inc. (AVAV) Investor Profile: Who’s Buying and Why?

AeroVironment, Inc. (AVAV) Debt vs. Equity Structure

AeroVironment, Inc.'s financial strategy involves a mix of debt and equity to fund its operations and growth initiatives. Understanding the balance between these two is crucial for investors.

As of the end of fiscal year 2024, AeroVironment, Inc. reported $296.9 million in total debt. This total comprises both short-term and long-term obligations, reflecting the company's financing decisions to support its strategic objectives.

• Short-term Debt: AeroVironment, Inc. has $12.9 million in short-term debt, representing obligations due within one year.
• Long-term Debt: The company’s long-term debt stands at $284 million, indicating financial obligations extending beyond the upcoming year.

The debt-to-equity ratio is a key metric for evaluating a company's financial leverage. For AeroVironment, Inc., the debt-to-equity ratio stands at 0.64 as of fiscal year 2024. This ratio suggests that AeroVironment, Inc. relies more on equity than debt to finance its assets, indicating a relatively conservative approach to financial leverage compared to some of its peers.

AeroVironment, Inc. has not engaged in significant recent debt issuances or refinancing activities. The company maintains a solid credit profile, which supports its financial flexibility.

Balancing debt and equity is crucial for AeroVironment, Inc. to maintain financial stability while pursuing growth opportunities. The company's current capital structure reflects a strategic approach to managing its financial obligations and leveraging equity to support long-term value creation.

Here's a summary of AeroVironment, Inc.'s debt profile:

For more insights into AeroVironment, Inc.'s financial health, check out: Breaking Down AeroVironment, Inc. (AVAV) Financial Health: Key Insights for Investors

AeroVironment, Inc. (AVAV) Liquidity and Solvency

Liquidity and solvency are vital indicators of a company's financial health, revealing its ability to meet short-term obligations and long-term liabilities, respectively. For AeroVironment, Inc. (AVAV), assessing these metrics provides insights into its operational efficiency and financial stability.

Assessing AeroVironment, Inc.'s Liquidity:

AeroVironment, Inc.'s liquidity can be evaluated through the following measures:

• Current and Quick Ratios: These ratios indicate the company's ability to cover its short-term liabilities with its short-term assets. The current ratio is calculated by dividing current assets by current liabilities, while the quick ratio excludes inventories from current assets to provide a more conservative measure.
• Analysis of Working Capital Trends: Monitoring the trend of working capital (current assets minus current liabilities) helps to understand the company's operational efficiency and its ability to manage short-term resources effectively.
• Cash Flow Statements Overview: Examining the cash flow statement provides insights into the company's cash generation and usage. It is important to analyze cash flows from operating, investing, and financing activities to understand the overall liquidity position.

Cash Flow Analysis:

An overview of AeroVironment, Inc.'s cash flow statements helps to identify trends in operating, investing, and financing activities. Positive cash flow from operations indicates the company's ability to generate cash from its core business activities, while investing and financing activities reveal how the company is deploying and raising capital.

For the fiscal year 2024, AeroVironment reported:

• Cash and cash equivalents increased to $124.9 million, compared to $93.8 million for the fiscal year 2023.
• The company's total debt outstanding was $29.9 million as of April 27, 2024.

Potential Liquidity Concerns or Strengths:

A comprehensive liquidity analysis involves identifying potential concerns or strengths based on the trends and ratios observed. Factors such as declining working capital, negative cash flow from operations, or high levels of debt may indicate liquidity risks. Conversely, a strong cash position, increasing working capital, and positive operating cash flow may signal financial strength.

Here is an overview of AeroVironment's financial data for fiscal year 2024:

For further insights, you can explore: Breaking Down AeroVironment, Inc. (AVAV) Financial Health: Key Insights for Investors

AeroVironment, Inc. (AVAV) Valuation Analysis

When evaluating whether AeroVironment, Inc. (AVAV) is overvalued or undervalued, several key financial metrics and market indicators should be considered.

Here's a breakdown of important valuation factors:

• Price-to-earnings (P/E) Ratio:
• As of April 17, 2025, AeroVironment's P/E ratio is approximately 126.16 based on a trailing twelve-month (TTM) EPS of $1.17 and a stock price of $147.61.
• Another source lists the P/E ratio as -25.6, which could be due to differing data sources or calculation methods.
• The average historical P/E ratio for the last ten years is 133.18.
• AeroVironment's forward P/E ratio is projected to average around 27.7x over the next 5 fiscal years.
• The current P/E ratio is higher than the Aerospace & Defense industry average.
• Price-to-book (P/B) Ratio:
• AeroVironment's P/B ratio is around 4.59 as of April 17, 2025.
• This is a 23% premium compared to its peers.
• The P/B ratio has fluctuated over the past five years, peaking in April 2024 at 5.5x and hitting a low in April 2020 at 2.9x.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio:
• AeroVironment's latest twelve months EV/EBITDA is 47.1x.
• From fiscal years 2020 to 2024, the EV/EBITDA ratio averaged 35.8x.
• Compared to similar companies in the industry, AeroVironment's EV/EBITDA is relatively high.

Here's a table summarizing these valuation ratios:

Stock price trends and historical data can offer insights into market sentiment and company performance:

• 52-Week Range: $102.25 - $236.60.
• Over the last 12 months, the stock price has increased by approximately 0.62%.
• Yahoo Finance reports a 1-year target estimate of $200.00.

AeroVironment does not currently offer a dividend yield.

• Dividend Yield: 0.00% (both trailing and forward).
• Payout Ratio: 0.00%.

Analysts' consensus can provide a general outlook on the stock:

• The consensus rating for AeroVironment is 'Buy'.
• Based on ratings from 8 analysts, the consensus price target is $177.43.
• TradingView indicates an analyst target price of $187.80, with estimates ranging from $146.00 to $225.00.

For more insights into AeroVironment's investors, consider reading: Exploring AeroVironment, Inc. (AVAV) Investor Profile: Who’s Buying and Why?

AeroVironment, Inc. (AVAV) Risk Factors

AeroVironment, Inc. (AVAV) faces a variety of risks that could significantly impact its financial health. These risks can be broadly categorized into internal and external factors. Understanding these risks is crucial for investors to assess the company's stability and future prospects. For further insights into the company's strategic direction, see Mission Statement, Vision, & Core Values of AeroVironment, Inc. (AVAV).

External Risks:

External risks are those arising from the broader industry and macroeconomic environment.

• Industry Competition: The unmanned aircraft systems (UAS) and related services market is highly competitive. Increased competition could lead to pricing pressures, reduced market share, and decreased profitability for AeroVironment, Inc. (AVAV).
• Regulatory Changes: Changes in government regulations regarding the use of UAS, both domestically and internationally, could restrict the company's operations, increase compliance costs, and limit market access.
• Market Conditions: Economic downturns, geopolitical instability, and shifts in defense spending priorities can all negatively impact demand for AeroVironment, Inc. (AVAV)'s products and services. For instance, reduced defense budgets in key markets could lead to decreased orders.

Internal Risks:

Internal risks are specific to AeroVironment, Inc. (AVAV)'s operations and strategic decisions.

• Operational Risks: These include risks related to product development, manufacturing, and supply chain management. Delays in product launches, quality control issues, or disruptions in the supply chain could adversely affect the company's revenue and profitability.
• Financial Risks: Financial risks encompass factors like debt levels, access to capital, and currency exchange rate fluctuations. High debt levels could strain the company's finances, while unfavorable exchange rates could reduce the value of international sales.
• Strategic Risks: Strategic risks involve decisions related to market positioning, acquisitions, and technological innovation. Failure to adapt to changing market dynamics, unsuccessful acquisitions, or a lack of innovation could weaken the company's competitive position.

Risks Highlighted in Recent Filings:

AeroVironment, Inc. (AVAV)'s recent earnings reports and filings provide additional insights into specific risks the company faces. While specific details may vary depending on the filing date, common themes include:

• Dependence on Government Contracts: A significant portion of AeroVironment, Inc. (AVAV)'s revenue comes from contracts with the U.S. government and its allies. Any reduction or cancellation of these contracts could have a material adverse effect on the company's financial performance.
• Technological Obsolescence: The UAS industry is characterized by rapid technological advancements. AeroVironment, Inc. (AVAV) must continuously innovate to remain competitive. Failure to develop and introduce new and improved products could lead to a loss of market share.
• Cybersecurity Threats: As a technology company, AeroVironment, Inc. (AVAV) is vulnerable to cybersecurity threats. A successful cyberattack could compromise sensitive data, disrupt operations, and damage the company's reputation.

Mitigation Strategies:

AeroVironment, Inc. (AVAV) employs various strategies to mitigate these risks. These may include:

• Diversification: Diversifying its product offerings and customer base to reduce reliance on any single market or customer.
• Strategic Partnerships: Forming partnerships and alliances to expand its technological capabilities and market reach.
• Investment in Research and Development: Investing in research and development to stay ahead of the curve in terms of technological innovation.
• Risk Management Programs: Implementing robust risk management programs to identify, assess, and mitigate potential risks.

AeroVironment, Inc. (AVAV) Growth Opportunities

AeroVironment, Inc. (AVAV) demonstrates strong future growth prospects driven by several key factors, including product innovations, market expansions, strategic initiatives, and competitive advantages.

Here's a detailed look:

• Product Innovations: AeroVironment consistently invests in research and development to create cutting-edge solutions. Their focus on advanced unmanned systems and related technologies positions them well in a rapidly evolving market.
• Market Expansions: The company strategically expands its presence in both domestic and international markets. Growth is seen in areas such as defense, public safety, and commercial sectors, increasing its revenue streams.
• Acquisitions: AeroVironment has a track record of strategic acquisitions that complement its existing capabilities and broaden its market reach. These acquisitions often bring new technologies and expertise into the company.

AeroVironment's revenue growth projections and earnings estimates reflect a positive outlook. Analysts predict continued growth, driven by increasing demand for unmanned systems and related services. For example, the company's fiscal year 2024 saw impressive financial results, setting a strong foundation for future performance. While specific forward-looking financial figures can fluctuate, the overall trend suggests sustained expansion.

Strategic initiatives and partnerships further enhance AeroVironment's growth potential:

• Strategic Partnerships: Collaborations with other technology companies and defense contractors extend AeroVironment's capabilities and market access.
• Government Contracts: Securing significant government contracts provides a stable revenue base and validates the company's technological capabilities.

AeroVironment possesses several competitive advantages that support its growth trajectory:

• Technological Leadership: The company's expertise in unmanned systems and related technologies gives it a competitive edge.
• Established Customer Relationships: Strong relationships with key customers, including the U.S. Department of Defense, provide recurring revenue and opportunities for expansion.
• Comprehensive Solutions: AeroVironment offers a range of products and services, creating a comprehensive solution for its customers and differentiating it from competitors.

For additional insights into AeroVironment's investor profile, see Exploring AeroVironment, Inc. (AVAV) Investor Profile: Who’s Buying and Why?