AeroVironment, Inc. designs, develops, produces, delivers, and supports a portfolio of robotic systems and related services for government agencies and businesses in the United States and internationally. It operates through Small Unmanned Aircraft Systems (SUAS), Tactical Missile System (TMS), Medium Unmanned Aircraft Systems (MUAS), and High Altitude Pseudo-Satellite Systems (HAPS) segments. The company supplies UAS, TMS, unmanned ground vehicle, and related services primarily to organizations within the U.S. Department of Defense, other federal agencies, and to international allied governments. It also designs, engineers, tools, and manufactures unmanned aerial and aircraft systems, including airborne platforms, payloads and payload integration, ground control systems, and ground support equipment and other items and services related to unmanned aircraft systems. In addition, the company offers small UAS products, including training, spare parts, product repair, product replacement, and the customer contracted operation. Further, it develops high-altitude pseudo-satellite UAS systems. AeroVironment, Inc. was incorporated in 1971 and is headquartered in Arlington, Virginia.

AeroVironment appears to be a company with a strong balance sheet, but without convincing operating profitability so far, which limits its re-rating potential. Liquidity is very comfortable: a quick ratio of 3.59 and a current ratio of 4.30 are well above industry benchmarks, and cash on hand of $632 million supports financial stability. The debt burden is moderate: debt/equity of 0.17 is below the median, although long-term debt has risen to $729 million, so the balance sheet is no longer as “clean” as it was a year ago. From a valuation perspective, the P/S ratio of 3.52 looks expensive relative to the industry, while the P/B ratio of 1.62, by contrast, looks moderate and partially offsets the high revenue multiple. P/E and P/FCF do not provide a complete signal because of zero values, which usually indicates either instability in the base or accounting-specific factors, and this reduces the quality of the multiple-based analysis. In terms of efficiency, the picture is weaker: ROE, ROA, ROI, operating margin, and net profit margin are all zero, meaning the company is not yet demonstrating sustainable returns on capital and assets. At the same time, a gross margin of 26.51% and gross profit of $203 million show that at the gross economics level the business is capable of generating an acceptable margin, although it is below the industry median. Revenue of $642 million and net income of $63 million are above industry benchmarks, and EBITDA of $120 million confirms operating scale. However, the EPS forecast trend is weaker than the current EPS, suggesting more cautious market expectations for future earnings. Shareholders’ equity of $4.396 billion and net worth of 7.09 look like a strong foundation for valuation, but growth in assets and equity is not accompanied by a comparable increase in profitability. Overall, the fundamentals support a neutral-to-negative view: the balance sheet is solid, the business is sizable, but the revenue multiple is stretched, and the quality of earnings and return on capital are not yet convincing enough. For an investor, this means the stock deserves a premium for stability and liquidity, but not for strong operating efficiency, so a cautious adjustment of expectations is appropriate.

AeroVironment, Inc.

Сильный индекс, без изменений. Быки в растерянности.

Strong index, flat. The bulls are confused.

Сильный индекс, без изменений. Рынок на стороне быков.

Strong index, flat. The market is on the bulls' side.

Слабый индекс, незначительно упал

AVAV’s strong balance sheet and high liquidity are offset by an expensive P/S and weak profitability, so fundamentals are likely to limit the upside.

L3Harris Technologies, Inc. LHX uses a structured process to monitor the cost and performance of its long-term contracts. The company establishes an estimated total cost at completion based on contract complexity and perceived risks, and regularly reviews progress and performance. This process provides an opportunity to adjust cost estimates as technical, schedule and cost risks are retired.
Contract execution is particularly important because L3Harris’ production contracts are mainly fixed-price, while development contracts are generally cost-type. Under fixed-price arrangements, the company can benefit from cost savings, but it also carries the burden of cost overruns. As a result, effective monitoring of contract costs and execution can have a direct effect on profitability.
L3Harris’ recent results show the potential earnings impact of this process. Net favorable Estimate at Completion (‘EAC”) adjustments affected earnings by $47 million in 2025 compared with $39 million in 2024. These adjustments reflect changes in estimated costs and transaction prices, with the cumulative impact recognized in operating income and future revenues and margins adjusted based on revised estimates.
Continued discipline in contract execution could remain an important factor for L3Harris’ margin performance. The company notes that cost estimates can improve when technical, schedule and cost risks are successfully retired, while supply-chain disruptions, inflation, labor issues, design challenges and program execution problems can increase estimated costs. Managing these factors effectively could support more consistent profitability as contracts progress.
Companies Managing Contract Cost and EAC Performance
Effective contract cost management can help aerospace and defense companies manage profitability as long-term programs progress. Northrop Grumman Corporation NOC and AeroVironment, Inc. AVAV use contract estimates and adjustments to reflect changes in expected program performance.
Northrop Grumman uses EAC adjustments to reflect changes in estimated contract earnings, which can affect sales, operating income and margins. It reported $209 million of net favorable EAC adjustments in 2025.
AeroVironment uses cumulative catch-up adjustments to reflect changes in estimated contract performance and reported $14.3 million of favorable cumulative catch-up adjustments in fiscal 2026.
Earnings Estimates for LHX
The Zacks Consensus Estimate for 2026 and 2027 earnings per share suggests year-over-year growth of 9.79% and 14.44%, respectively.
LHX Stock Is Trading at a Discount
LHX is trading at a discount relative to the industry, with a forward 12-month price-to-sales of 1.79X compared with the industry average of 2.24X.
LHX Stock Price Performance
Over the past year, LHX shares have fallen 18.9% compared with the industry’s 14.9% decline.
LHX’s Zacks Rank
LHX stock currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Can L3Harris' Contract Cost Control Support Future Margin Growth?

Key Points
New AeroVironment acquisition Blue Halo just landed a $100 million Pentagon contract.
Blue Halo has been incorporated into a new AV Space, Cyber, and Directed Energy division.
SCDE is not yet profitable.
Established in 1971, AeroVironment (NASDAQ: AVAV) has evolved over the past six decades, first from a maker of experimental solar-powered aircraft, then to a specialist in small, innovative surveillance drones, and then to a major source of weaponized drones -- specifically, Switchblade loitering munitions -- for the military. And the bigger AeroVironment gets, the more new areas of the aerospace industry it's affecting.
Case in point: In May 2025, AeroVironment announced it had closed its purchase of defense company Blue Halo for $4.1 billion. For AeroVironment -- a stock worth less than $7.5 billion today -- this was a transformative deal, turning the company from a drone specialist into a self-described "global defense technology leader with integrated capabilities across air, land, sea, space, and cyber."
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Blue Halo makes green for AeroVironment
You can see the effect of this acquisition right on the company's income statement, where AeroVironment's revenues leapt from $820 million in the year before buying Blue Halo to $2 billion in the year after. Probably $619 million of the improvement can be traced directly to Blue Halo, now part of the company's "Space, Cyber, and Directed Energy" (SCDE) division.
Not all the news was good. Profitable in 2025, AV began losing money soon after. It was unprofitable in every quarter of 2026, and in the first quarter of 2027 as well -- with SCDE in particular described as unprofitable. Analysts are hopeful, however, that things will work out well for AV. Forecasts compiled by S&P Global Market Intelligence show AV turning GAAP-profitable by the end of this year, with $0.45 per share in earnings -- then tripling that profit in 2028, doubling it in 2029, and nearly doubling it again by 2031.
If these forecasts prove accurate, AeroVironment stock, which trades at infinity-times-earnings today, could be valued as cheaply as 25x its estimated earnings in 2031.
Blue Halo glows brightly
How much of this improvement will come from Blue Halo, specifically? That remains to be seen -- just as we wait to see how quickly Blue Halo's $4.1 billion purchase price will pay AeroVironment back in the form of new revenue.
Searching through the Defense Department archives, it appears that Blue Halo has only ever been awarded four Pentagon contracts -- most of them quite small:
$10.6 million awarded in June 2021 for training services on the Stinger surface-to-air missile.
$20 million in February 2026 for "next-generation models ... data integration and databasing and artificial intelligence and machine learning."
Part of a $97 million January 2025 award "for the processing, behavior characterization, and performance prediction of advanced aerospace materials," divided among Blue Halo and three other companies and organizations.
And most recently, $99.8 million awarded on Sept. 11, 2026, for "research and development to advance scientific knowledge and state-of-the-art technology supporting space systems."
The most recent space contract jumps out as by far the largest award granted exclusively to Blue Halo, the first big win for the SCDE division since it became part of AeroVironment, and proof positive that AeroVironment is evolving into a space stock -- generating revenue in this new growth market. At just under $100 million, this space contract alone represents nearly as much as SCDE collected in revenue in the first fiscal quarter of 2027 ($134.5 million).
The upshot for investors
Still, AeroVironment investors shouldn't get too excited here. According to the Pentagon announcement, the $99.8 million space systems award isn't due for completion until late 2031 -- implying the revenue from this contract will be spread over five years. That means the award will really only increase annual revenue by about $20 million.
When you further consider that SCDE's revenue isn't currently profitable for AV (SCDE's adjusted EBITDA losses were $9 million in Q1), my hunch is it's going to be a long time before this $4.1 billion acquisition even begins to pay for itself.
Should you buy stock in AeroVironment right now?
Before you buy stock in AeroVironment, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and AeroVironment wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $387,158!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,365,749!*
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AeroVironment. The Motley Fool has a disclosure policy.

Drones Stock AeroVironment Is Now a Space Stock, Too

Key Points
The U.S. Army just awarded AV a $464.8 million contract to build laser guns.
AV's 30-kilowatt LOCUST X3 laser weapon system can bring down a half-ton Group 3 military drone.
This is America's first-ever contract for the mass production of laser weapons.
For nearly as long as I've been writing for The Motley Fool, the U.S. Pentagon has wanted a laser gun. As far back as 2004, I wrote about a Northrop Grumman (NYSE: NOC) project to load a chemical oxygen iodine laser onto a Boeing (NYSE: BA) 747 and use it to shoot missiles out of the sky.
Nothing ever came of that particular project.
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But something might come of this next one.
Mass-market laser guns are a thing now
Earlier this month, defense company AeroVironment (NASDAQ: AVAV) -- best known as a manufacturer of military drones -- said that the U.S. Army is paying it $464.8 million to produce laser weapons under the Enduring-High Energy Laser (E-HEL) program.
Calling it a "landmark contract," the company, often referred to as AV, said that "this award represents the first-ever production contract for directed energy systems in United States history."
And it's true! Over the years, I've covered multiple contracts awarded to multiple defense contractors for laser weapons of all shapes, sizes, and acronyms: Lockheed Martin (NYSE: LMT) got the High Energy Laser Scaling Initiative (HELSI). Kratos Defense & Security (NASDAQ: KTOS) built the 30-kilowatt AN/SEQ-3 Laser Weapon System (LAWS). Northrop Grumman, recovering from its airborne laser fiasco, went on to win a contract to build a 150-kilowatt Laser Weapon System Demonstrator (LWSD).
Up to now, however, every laser weapons contract awarded has been for research and development, building and testing a few prototypes at a time. But AeroVironment's contract is for laser weapon production -- and that's something never before seen.
AV Chief Executive Officer Wahid Nawabi calls this "a defining moment not only for AV, but for the future of modern defense" and is promising to execute AV's contract to produce "scalable, modular, and cost-effective defense solutions," producing dozens of 30-kilowatt LOCUST X3 laser weapon systems during the next few years that are capable of taking down even half-ton Group 3 military drones.
How much does a laser gun cost?
Without a firm number on the number of lasers called for in the E-HEL contract, it's hard to say precisely how much the new counter-drone laser weapon will cost -- or how much money AeroVironment might end up making on this contract. But working off the assumption that if there were even just 200 weapons on order, AV would describe its contracted output in the "hundreds," not "dozens," let's pick a number out of a hat: 144 laser weapons -- or a dozen dozen.
If that's the right number, one might calculate that a single E-HEL laser might cost as little as $3.2 million compared to the cost of firing off two $2 million Patriot missiles to make sure of bringing down a drone. More important than the system cost, though, is the operating cost of E-HEL -- which military analysts put at just $1 per shot (for the cost of the energy to take the shot). A Patriot missile has no second-use option.
At that price, I expect E-HEL to become very popular with U.S. Army accountants -- and with the Navy, Marine Corps, and Air Force as well. And I expect the AeroVironment department responsible for building E-HEL to enjoy brisk business.
How did AeroVironment win the contract?
Speaking of which, AeroVironment probably deserves a round of applause for the decision to buy defense company Blue Halo for $4.1 billion last year. Now part of the drone company's new Space, Cyber, and Directed Energy (or SCDE) division, Blue Halo is almost certainly the AV division that will build the E-HEL.
Last year, SCDE contributed about $619 million to AV's roughly $2 billion in total revenue. As E-HEL production increases, expect SCDE to become an even bigger part of AV's business.
Is AeroVironment stock a buy?
That's the question that bugs me. Is AeroVironment stock a buy? Because, as optimistic as I am about the prospects for E-HEL laser weapons becoming a must-have item for the U.S. military -- especially in a time of rising threats from drones -- I'm still not convinced that this is a game changer for AeroVironment stock.
Last quarter, AV reported strong sales at its SCDE division -- $134.5 million. The division still wasn't profitable, reporting a $9 million loss based on earnings before interest, taxes, depreciation, and amortization (EBITDA). If laser weapons turn out to be higher-margin than SCDE's other products, that could change.
But if not, then this could turn out to be just another case of "great product, great company...lousy stock."
Should you buy stock in AeroVironment right now?
Before you buy stock in AeroVironment, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and AeroVironment wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $406,141!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,347,745!*
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AeroVironment, Boeing, Kratos Defense & Security Solutions, and Lockheed Martin. The Motley Fool has a disclosure policy.

Laser Weapons Are Real Now -- and You Can Invest in Them With AeroVironment Stock

The S&P 500 Index ($SPX) (SPY) closed down -0.58% on Thursday, the Dow Jones Industrial Average ($DOWI) (DIA) closed down -0.60%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down -1.08%. E-mini S&P futures (ESU26) fell -0.61%, and September E-mini Nasdaq futures (NQU26) fell -1.07%.
Stock indexes settled lower on Thursday, with the S&P 500 and Dow Jones Industrials dropping to 5-week lows. Soaring energy prices pushed global bond yields sharply higher on Thursday, weighing on stocks. WTI crude oil surged more than +6% on Thursday to a 3.5-month high amid fears that the US-Iran war will persist, increasing inflation risks and prompting the world’s central banks to keep raising interest rates. The 10-year UK Gilt yield jumped to a 19-year high today of 5.38%, the 10-year German Bund yield surged to a 17-year high of 3.51%, and the 10-year T-note yield rose to a 2.75-year high of 4.96%.
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Stocks added to their losses on Thursday, and T-note yields climbed further after US Aug PPI rose more than expected, signaling persistent price pressures, and after weekly jobless claims remained low, signaling labor market strength.
US weekly initial unemployment claims fell -1,000 to 206,000, close to expectations of 205,000 and signaling a stable labor market.
US Aug PPI final demand rose +5.4% y/y, stronger than expectations of +5.3% y/y. Aug PPI ex-food and energy rose +4.6% y/y, right on expectations.
US Aug existing home sales fell -2.0% m/m to a 14-month low of 3.98 million, right on expectations.
The escalating trade war between the US and Canada is also weighing on market sentiment. On Tuesday, Canada imposed tariffs of 15% to 50% on hundreds of US goods in retaliation for the US action last month to impose 50% tariffs on $20 billion of imports from Canada. The US responded by moving to block imports of some Canadian products and slapping new tariffs on others, as well as seeking to bar Canadian companies from selling to US government contractors.
Oct WTI crude oil prices (CLV26) surged more than +6% on Thursday to a 3.5-month high. Crude prices are climbing after Iran said that it is ready for a more intense war and will escalate counterstrikes if the US continues attacking its territory and infrastructure. The prospect of a lengthy conflict that limits crude supplies from the Middle East is underpinning crude oil prices. Crude oil prices added to their gains on Thursday after Saudi Arabia told OPEC that its crude production in August fell to 6.238 million bpd, the lowest since 1990.
The markets are discounting a 75% chance of a +25 bp rate hike at the next FOMC meeting on September 15-16.
Overseas stock markets settled mixed on Thursday. The Euro Stoxx 50 dropped to a 6-week low and closed down -0.67%. China's Shanghai Composite closed down -0.43%. Japan's Nikkei-225 Stock Average closed up +0.20%.
Interest Rates
December 10-year T-notes (ZNZ6) closed down by -23 ticks. The 10-year T-note yield rose +10.7 bp to 4.948%. T-notes tumbled to a 2.75-year nearest futures low on Thursday, and the 10-year T-note yield rose to a 2.75-year high of 4.963%. T-notes sold off as crude oil prices surged, which boosted inflation expectations. WTI crude oil rose more than +6% on Thursday to a 3.5-month high, lifting the 10-year breakeven inflation rate to a 3.25-month high of 2.419%.
On the positive side for T-notes was the decline in US Aug existing home sales to a 14-month low. T-notes also found support on strong demand for the Treasury’s $22 billion auction of 30-year T-bonds that had a bid-to-cover ratio of 2.61, well above the 10-auction average of 2.40.
European government bond yields moved sharply higher on Thursday. The 10-year German bund yield jumped to a 17-year high of 3.508% and finished up +5.7 bp to 3.501%. The 10-year UK gilt yield soared to a 19-year high of 5.376% and finished up +11.2 bp to 5.374%.
The ECB, as expected, raised the deposit facility rate by 25 bp to 2.50% and said inflation will stay above 2% for an "extended period."
The ECB raised its 2026 Eurozone GDP forecast to +0.9% from a prior forecast of +0.8%, and kept its 2026 inflation ex-food and energy forecast unchanged at 2.5%.
Markets are discounting a 97% chance of a +25 bp ECB rate hike at the ECB’s next meeting on October 29.
US Stock Movers
Chipmakers and AI-infrastructure stocks retreated on Thursday, pressuring the broader market. CoreWeave (CRWV), Intel (INTC), and Lam Research (LRCX) closed down more than -5%, and Micron Technology (MU) and Western Digital (WDC) closed down more than -4%. Also, ARM Holdings (ARM), SanDisk (SNDK), Advanced Micro Devices (AMD), KLA Corp (KLAC), Marvell Technology (MRVL), and Applied Materials (AMAT) closed down more than -3%, and Nvidia(NVDA), ASML Holding NV (ASML), and Seagate Technology Holdings Plc (STX) closed down more than -2%.
Copper-producing stocks are falling today, with copper prices down more than -4% after Reuters reported that the White House has not yet made a decision on refined copper tariffs as it weighs concerns of higher prices raising manufacturing costs against the potential benefits of encouraging more domestic mining. Southern Copper (SCCO) closed down more than -7%, and Freeport-McMoRan (FCX) closed down more than -6%. Also, Rio Tinto Plc (RIO) closed down more than -4%, and Newmont Corp (NEM) closed down more than -2%.
Home builders and suppliers moved lower on Thursday after the 10-year T-note yield jumped to a 2.75-year high, pushing up mortgage rates and weighing on housing demand. Lennar (LEN), KB Home (KBH), and Builders Firstsource (BLDR) closed down more than -3%. Also, DR Horton (DHI) and Pulte Group (PHM) closed down more than -2%, and Toll Brothers (TOL) and Home Depot (HD) closed down more than -1%.
Cooper Cos (COO) closed down more than -14% to lead losers in the S&P 500 after reporting Q3 net sales of $1.07 billion, below the consensus of $1.10 billion, and cutting its full-year revenue forecast to $4.23 billion to $4.25 billion from a previous forecast of $4.29 billion to $4.32 billion, weaker than the consensus of $4.31 billion.
American Eagle Outfitters (AEO) closed down more than -13% after reporting Q2 comparable sales rose +6.00%, weaker than the consensus of +6.47%.
FactSet Research Systems (FDS) closed down more than -5% after OpenAI said it’s releasing ChatGPT for Financial Services, a new tool for investment bankers and equity researchers.
AeroVironment (AVAV) closed up more than +4% after reporting Q1 revenue of $480.5 million, stronger than the consensus of $455.8 million.
Apple (AAPL) closed up more than +3% to lead gainers in the Dow Jones Industrials after analysts were generally positive about the company’s new iPhone Duo, its first foldable phone.
Earnings Reports (9/11/2026)
Kroger Co/The (KR) and Rent the Runway Inc (RENT).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
More news from Barchart

Stocks Settle Lower as Surging Crude Prices Boost Fed Rate Hike Chances

Key Points
AeroVironment is only expecting to grow about 10% this fiscal year.
Non-GAAP profits are improving, but GAAP results show the struggle generating a real profit.
Investors haven't been impressed with the trend in results and this isn't a value given the weak top and bottom line numbers.
Aerovironment (NASDAQ: AVAV) has struggled to gain traction on the market in 2026 as the company's drone business has lost some momentum. And recently reported earnings don't show any signs that results are picking up anytime soon. Double-digit growth on the top line won't wow investors, and struggles turning that into net income are a real problem long-term. I dig into the results and whether or not this is a value in this video.
*Stock prices used were end-of-day prices of September 10, 2026. The video was published on September 10, 2026.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Should you buy stock in AeroVironment right now?
Before you buy stock in AeroVironment, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and AeroVironment wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $410,024!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,372,815!*
Now, it’s worth noting Stock Advisor’s total average return is 950% — a market-crushing outperformance compared to 211% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of September 10, 2026.
Travis Hoium has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AeroVironment. The Motley Fool has a disclosure policy. Travis Hoium is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.
Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Why AeroVironment's Latest Report Is a Red Flag

The S&P 500 Index ($SPX) (SPY) is down -0.42% today, the Dow Jones Industrial Average ($DOWI) (DIA) is down -0.43%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.69%. E-mini S&P futures (ESU26) are down -0.40%, and September E-mini Nasdaq futures (NQU26) are down -0.65%.
Stock indexes are under pressure today, with the S&P 500 and Dow Jones Industrials dropping to 5-week lows. Soaring energy prices are pushing global bond yields higher today, weighing on stocks. WTI crude oil is up more than +3% today at a 3.5-month high amid fears that the US-Iran war will persist, increasing inflation risks and prompting the world’s central banks to keep raising interest rates. The 10-year UK Gilt yield rose to a 19-year high today of 5.36%, the 10-year German Bund yield climbed to a 15-year high of 3.50%, and the 10-year T-note yield rose to a 2.75-year high of 4.93%.
Join 200K+ Subscribers: Find out why the midday Barchart Brief newsletter is a must-read for thousands daily.
Stocks added to their losses today, and T-note yields climbed further after US Aug PPI rose more than expected, signaling persistent price pressures, and after weekly jobless claims remained low, signaling labor market strength.
US weekly initial unemployment claims fell -1,000 to 206,000, close to expectations of 205,000 and signaling a stable labor market.
US Aug PPI final demand rose +5.4% y/y, stronger than expectations of +5.3% y/y. Aug PPI ex-food and energy rose +4.6% y/y, right on expectations.
US Aug existing home sales fell -2.0% m/m to a 14-month low of 3.98 million, right on expectations.
The escalating trade war between the US and Canada is also weighing on market sentiment. On Tuesday, Canada imposed tariffs of 15% to 50% on hundreds of US goods in retaliation for the US action last month to impose 50% tariffs on $20 billion of imports from Canada. The US responded by moving to block imports of some Canadian products and slapping new tariffs on others, as well as seeking to bar Canadian companies from selling to US government contractors.
Oct WTI crude oil prices (CLV26) are up more than +3% today at a 3.5-month high. Crude prices are climbing after Iran said that it is ready for a more intense war and will escalate counterstrikes if the US continues attacking its territory and infrastructure. The prospect of a lengthy conflict that limits crude supplies from the Middle East is underpinning crude oil prices. Crude oil prices added to their gains today after Saudi Arabia told OPEC that its crude production in August fell to 6.238 million bpd, the lowest since 1990.
The markets are discounting a 72% chance of a +25 bp rate hike at the next FOMC meeting on September 15-16.
Overseas stock markets are mixed today. The Euro Stoxx 50 dropped to a 6-week low and is down -0.42%. China's Shanghai Composite closed down -0.43%. Japan's Nikkei-225 Stock Average closed up +0.20%.
Interest Rates
December 10-year T-notes (ZNZ6) are down by -17 ticks. The 10-year T-note yield is up +7.3 bp to 4.914%. T-notes tumbled to a 2.75-year nearest futures low, and the 10-year T-note yield rose to a 2.75-year high of 4.928%. T-notes are under pressure from higher crude oil prices, which are boosting inflation expectations. WTI crude oil is up more than +3% today at a 3.5-month high, lifting the 10-year breakeven inflation rate to a 3.25-month high of 2.408%. Supply pressures are also weighing on T-notes as the Treasury will auction $22 billion of 30-year T-bonds later today. T-notes added to their losses today after Aug PPI rose more than expected.
European government bond yields are moving higher today. The 10-year German bund yield climbed to a new 15-year high of 3.495% and is up +4.8 bp to 3.492%. The 10-year UK gilt yield rose to a 19-year high of 5.362% and is up +9.7 bp to 5.358%.
The ECB, as expected, raised the deposit facility rate by 25 bp to 2.50% and said inflation will stay above 2% for an "extended period."
The ECB raised its 2026 Eurozone GDP forecast to +0.9% from a prior forecast of +0.8%, and kept its 2026 inflation ex-food and energy forecast unchanged at 2.5%.
Markets are discounting a 77% chance of a +25 bp ECB rate hike at the ECB’s next meeting on October 29.
US Stock Movers
Chipmakers and AI-infrastructure stocks are sliding today, pressuring the broader market. CoreWeave (CRWV), Intel (INTC), and Lam Research (LRCX) are down more than -4%, and Micron Technology (MU), SanDisk (SNDK), and Western Digital (WDC) are down more than -3%. Also, ARM Holdings (ARM), Advanced Micro Devices (AMD), and Applied Materials (AMAT) are down more than -2%, and Nvidia(NVDA) is down more than 2% to lead losers in the Dow Jones Industrials.
Copper-producing stocks are falling today, with copper prices down more than -4% after Reuters reported that the White House has not yet made a decision on refined copper tariffs as it weighs concerns of higher prices raising manufacturing costs against the potential benefits of encouraging more domestic mining. Freeport-McMoRan (FCX) is down more than -7%, and Southern Copper (SCCO) is down more than -6%. Also, Rio Tinto Plc (RIO) is down more than -4%, and Newmont Corp (NEM) is down more than -2%.
Home builders and suppliers are retreating today after the 10-year T-note yield jumped to a 2.75-year high, pushing up mortgage rates and weighing on housing demand. Lennar (LEN) is down more than -4%, and DR Horton (DHI), Pulte Group (PHM), KB Home (KBH), and Builders Firstsource (BLDR) are down more than -3%. Also, Toll Brothers (TOL) is down more than -2%.
AeroVironment (AVAV) is up more than +10% to lead drone makers higher after reporting Q1 revenue of $480.5 million, stronger than the consensus of $455.8 million. Also, Red Cat Holdings (RCAT) is up more than +3%, and Defiance Drone and Modern Warfare ETF (JEDI), Aevex Corp (AVEX), Unusual Machines (UMAC), and Kratos Defense & Security Solutions (KTOS) are up more than +2%.
Cybersecurity stocks are climbing today, a supportive factor for stocks. Fortinet (FTNT) and Okta (OKTA) are up more than +2%, and CrowdStrike Holdings (CRWD), Palo Alto Networks (PANW), and SentinelOne (S) are up more than +1%.
American Eagle Outfitters (AEO) is down more than -14% after reporting Q2 comparable sales rose +6.00%, weaker than the consensus of +6.47%.
Cooper Cos (COO) is down more than -13% to lead losers in the S&P 500 after reporting Q3 net sales of $1.07 billion, below the consensus of $1.10 billion, and cutting its full-year revenue forecast to $4.23 billion to $4.25 billion from a previous forecast of $4.29 billion to $4.32 billion, weaker than the consensus of $4.31 billion.
Driven Brands Holdings (DRVN) is down more than -3% after Bank of America Global Research double-downgraded the stock to underperform from buy with a price target of $12.
Kymera Therapeutics (KYMR) is up more than +1% after Wolfe Research upgraded the stock to outperform from peer perform with a price target of $180.
Earnings Reports (9/10/2026)
Adobe Inc (ADBE), Copart Inc (CPRT), Macy's Inc (M), Oracle Corp (ORCL).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

Stocks Retreat as 10-year T-note Yield Reaches New 2.75-year High

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AeroVironment (AVAV) Q1 2027 Earnings Call Transcript

(RTTNews) - Below are the earnings highlights for AeroVironment, Inc. (AVAV):
Earnings: -$5.07 million in Q1 vs. -$67.37 million in the same period last year. EPS: -$0.10 in Q1 vs. -$1.44 in the same period last year. Excluding items, AeroVironment, Inc. reported adjusted earnings of $0.59 per share for the period.
Revenue: $480.49 million in Q1 vs. $454.68 million in the same period last year.
-Guidance: Full year EPS guidance: $ 3.02 To $ 3.34 Full year revenue guidance: $ 2.125 B To $ 2.225 B

AeroVironment, Inc. Q1 Earnings Summary

Key Points
Investors were cautiously optimistic heading into the drone makers' quarterly financial report.
AeroVironment delivered everything shareholders were looking for and more.
The stock is cheap compared to just a few months ago.
This year has been quite the rollercoaster ride for AeroVironment (NASDAQ:AVAV) investors. After spiking more than 60% to kick off 2026, the stock lost more than 64% of its value due to restated financials and the loss of a key contract.
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Despite the obvious challenges, expectations were high heading into the defense company's quarterly financial report, and shareholders got what they were looking for. The results were a reminder that -- like the company's drones -- AeroVironment has further to fly.
Image source: The Motley Fool.
For the defense
AeroVironment delivered the results of its fiscal 2027 first quarter (ended Aug. 1), and that was a lot to like. The company generated record revenue, up 6% to $480.5 million, driven by strong sales in the autonomous systems segment. This drove adjusted diluted earnings per share (EPS) up 84% to $0.59.
For context, analysts' consensus estimates called for revenue of $456.1 million and adjusted EPS of $0.25, so AeroVironment sailed past expectations.
The automated systems (AxS) segment -- which includes drones -- grew 21% year over year to $346 million, while the space, cyber, and directed energy (SCDE) segment declined 21% to $134 million.
Other metrics confirmed the strength of its overall results. The company delivered bookings of $683 million, which jumped 71% year over year, resulting in a book-to-bill ratio of 1.4. AeroVironment also reported a record funded backlog of $1.5 billion, up 37% year over year and 23% sequentially. Its unfunded backlog -- which involves expected, but not obligated, future funding -- totaled $1.4 billion.
On Tuesday, the company secured its first international order for the LOCUST directed energy counter-drone system, valued at $50 million. This order came in the wake of AeroVironment's U.S. Army contract for $464.8 million for its Enduring-High Energy Laser (E-HEL) -- which marked the first-ever production contract for a high-energy laser weapons system in U.S. history. These were just two of several major contract wins during the quarter.
What the future holds
Management is optimistic about the future. AeroVironment maintained its full-year outlook, which calls for revenue in a range of $2.125 billion and $2.225 billion, representing 10% growth at the midpoint of its guidance. The company is also calling for adjusted diluted EPS of $3.16, or a decline of 4% at the midpoint. Management cited a planned facility and capacity expansion, which will increase its depreciation expense, as the reason for the lower profits.
AeroVironment's challenges from earlier this year have weighed on its stock price, while also making its valuation much more reasonable. The stock is selling for 44 times forward earnings and 32 times next year's expected earnings -- less than one-third their levels from earlier this year.
Wall Street is firmly onboard. Of the analysts who offered an opinion in September, 85% rate the stock a buy or strong buy, and none recommended selling -- and that was even before today's better-than-expected results.
To be clear, AeroVironment is a higher-risk, higher-reward stock, complete with lumpy sales, even lumpier profits, and extreme volatility. That said, the company's expanding product line and recent government contract wins highlight the potential for the drone-maker to take flight.
Should you buy stock in AeroVironment right now?
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AeroVironment Just Delivered Historic Results. Wall Street Says It's a Buy

The following companies are expected to report earnings after hours on 09/09/2026. Visit our Earnings Calendar for a full list of expected earnings releases.
The Cooper Companies, Inc. (COO)is reporting for the quarter ending July 31, 2026. The medical/dental supplies company's consensus earnings per share forecast from the 7 analysts that follow the stock is $1.11. This value represents a 0.91% increase compared to the same quarter last year. In the past year COO has beat the expectations every quarter. The highest one was in the 2nd calendar quarter where they beat the consensus by 10%. Zacks Investment Research reports that the 2026 Price to Earnings ratio for COO is 14.62 vs. an industry ratio of 22.10.
AeroVironment, Inc. (AVAV)is reporting for the quarter ending July 31, 2026. The aerospace and defense company's consensus earnings per share forecast from the 6 analysts that follow the stock is $0.22. This value represents a 31.25% decrease compared to the same quarter last year. Zacks Investment Research reports that the 2027 Price to Earnings ratio for AVAV is 46.49 vs. an industry ratio of 33.20, implying that they will have a higher earnings growth than their competitors in the same industry.
American Eagle Outfitters, Inc. (AEO)is reporting for the quarter ending July 31, 2026. The retail (shoe) company's consensus earnings per share forecast from the 6 analysts that follow the stock is $0.21. This value represents a 53.33% decrease compared to the same quarter last year. In the past year AEO has beat the expectations every quarter. The highest one was in the 2nd calendar quarter where they beat the consensus by 27.27%. Zacks Investment Research reports that the 2027 Price to Earnings ratio for AEO is 9.78 vs. an industry ratio of 10.10.
Lesaka Technologies, Inc. (LSAK)is reporting for the quarter ending June 30, 2026. The technology services company's consensus earnings per share forecast from the 1 analyst that follows the stock is $0.03. This value represents a 108.57% increase compared to the same quarter last year. Zacks Investment Research reports that the 2026 Price to Earnings ratio for LSAK is 150.67 vs. an industry ratio of 1.70, implying that they will have a higher earnings growth than their competitors in the same industry.
Limoneira Co (LMNR)is reporting for the quarter ending July 31, 2026. The agriculture company's consensus earnings per share forecast from the 3 analysts that follow the stock is $0.16. This value represents a 420.00% increase compared to the same quarter last year. Zacks Investment Research reports that the 2026 Price to Earnings ratio for LMNR is -33.40 vs. an industry ratio of 6.60.
Lakeland Industries, Inc. (LAKE)is reporting for the quarter ending July 31, 2026. The protection safety company's consensus earnings per share forecast from the 1 analyst that follows the stock is $-0.02. This value represents a 105.56% decrease compared to the same quarter last year. The "days to cover" for this stock exceeds 21 days. Zacks Investment Research reports that the 2027 Price to Earnings ratio for LAKE is -41.11 vs. an industry ratio of 16.40.
Skillsoft Corp. (SKIL)is reporting for the quarter ending July 31, 2026. The technology services company's consensus earnings per share forecast from the 1 analyst that follows the stock is $0.54. This value represents a 14.89% increase compared to the same quarter last year. In the past year SKIL has beat the expectations every quarter. The highest one was in the 2nd calendar quarter where they beat the consensus by 582.35%. Zacks Investment Research reports that the 2027 Price to Earnings ratio for SKIL is 2.22 vs. an industry ratio of 1.70, implying that they will have a higher earnings growth than their competitors in the same industry.
Culp, Inc. (CULP)is reporting for the quarter ending July 31, 2026. The home furnishings company's consensus earnings per share forecast from the 1 analyst that follows the stock is $0.44. This value represents a 2300.00% increase compared to the same quarter last year. Zacks Investment Research reports that the 2027 Price to Earnings ratio for CULP is 10.06 vs. an industry ratio of 13.30.

AeroVironment, Inc.

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