AeroVironment (AVAV) closed out FY 2026 with fourth quarter revenue of US$641.6 million and basic EPS of US$1.26, following a trailing twelve month period where revenue reached roughly US$2.0 billion and basic EPS stood at a loss of US$5.40. Over the past six reported quarters, the company has seen quarterly revenue range from US$167.6 million to US$641.6 million and basic EPS move between a loss of US$3.15 and a profit of US$1.56. This context may prompt investors to focus on how quickly margins can shift from loss making territory toward more stable profitability.

See our full analysis for AeroVironment.

With the headline numbers on the table, the next step is to compare these results with the prevailing narratives around AeroVironment, highlighting where the data supports current views and where it starts to challenge them.

Revenue Nears US$2.0b but Profit Still in the Red

• On a trailing twelve month basis, AeroVironment generated about US$2.0b of revenue, yet reported a loss of US$265.1 million and basic EPS of a loss of US$5.40, showing that strong top line figures are still paired with negative net income.
• Consensus narrative points to expansion into advanced defense technologies and international markets as a driver of long term stability, yet the current loss position means:
  • Revenue growth of 11.4% per year on a trailing basis sits slightly below the referenced US market revenue growth of 12.8% per year, which challenges the idea that AeroVironment is already outpacing the broader market.
  • Analysts expecting margins to move from a loss of 13.9% today to a 7.3% profit in three years are leaning on future execution, while the trailing loss of US$265.1 million shows that margin improvement is not visible in the recent history yet.

Sharp EPS Swings Test the Bearish Concerns

• Within FY 2026, AeroVironment’s quarterly basic EPS moved from a loss of US$3.15 in Q3 to a profit of US$1.26 in Q4 on revenue rising from US$408.0 million to US$641.6 million, underlining how quickly reported earnings can swing even over a short period.
• Bears argue that reliance on a few large contracts and regulation could keep earnings unpredictable, and the recent figures cut both ways:
  • The trailing twelve month loss of US$265.1 million and a five year pattern of widening losses at about 33.1% per year align with concerns about earnings volatility and pressure on net margins.
  • At the same time, the move from a quarterly loss of US$156.6 million in Q3 to a quarterly profit of US$63.2 million in Q4 shows that contract timing and execution can produce positive swings that may not fully fit a straight line bearish story on profitability.

For readers weighing whether these swings line up with the more cautious view on AeroVironment, it is worth seeing how skeptics frame the longer term risk reward trade off in their own words 🐻 AeroVironment Bear Case.

Valuation Gap vs DCF and Analyst Targets

• AeroVironment’s current share price of US$165.07 sits above the DCF fair value of US$81.68, while chosen analyst targets referenced here are set at US$251.93, so the stock trades above the DCF figure but below the target level used for this comparison.
• Bullish investors argue that earnings growth of about 77.85% per year and a path to profitability within three years justify paying above DCF fair value, and the numbers highlight both support and friction for that view:
  • The current P/S of 4.2x is lower than the US Aerospace & Defense industry average of 5.6x and the peer average of 6.0x, which supports the idea that revenue is not priced at a premium even though the share price is above the cited DCF fair value.
  • However, with the business still loss making on a trailing basis and net profit margin in negative territory, the gap between today’s unprofitable status and the earnings growth implied by those bullish expectations is still large.

If you want to see how bullish investors connect these valuation gaps to AeroVironment’s longer term growth story, the detailed bull case is a useful reference point 🐂 AeroVironment Bull Case.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for AeroVironment on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

If this mix of optimism and concern around AeroVironment leaves you undecided, consider acting sooner rather than later and weigh the trade offs yourself using 1 key reward and 1 important warning sign.

See What Else Is Out There

AeroVironment combines nearly US$2.0b in revenue with trailing losses, sharp EPS swings and a share price above DCF fair value, which keeps risk and valuation questions front and center.

If that mix of volatility and unprofitable results feels uncomfortable, balance your watchlist by checking companies screened for 74 resilient stocks with low risk scores that aim to keep downside risk in tighter check.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.