AeroVironment Inc. shares rose 2.9% in after-hours trading on Tuesday, reaching $144.91, after the defense contractor reported fiscal first-quarter 2027 results that crushed Wall Street expectations.
The company posted adjusted earnings of $0.59 per share, compared with the consensus estimate of $0.22 per share and $0.32 per share a year earlier. Revenue came in at $480.5 million, up 5.7% year over year and above the $452 million analysts had forecast. Adjusted EBITDA was $53.4 million, beating the $39.1 million estimate by 36.6%.
Operating margin improved to -2.3% from -15.2% in the same quarter last year, and free cash flow narrowed to -$35.95 million from -$146.5 million. The company's funded backlog grew to $1.5 billion, up from $1.2 billion at the end of April, signaling strong demand for its unmanned systems.
Management reaffirmed full-year fiscal 2027 revenue guidance of $2.18 billion at the midpoint, with a range of $2.12 billion to $2.22 billion, and adjusted EPS guidance of $3.18. EBITDA guidance of $315 million was slightly below the $318.2 million analyst estimate.
The stock has been under pressure, down about 40% year to date and more than 40% since the start of the Iran War. A divided Congress following the midterm elections and the cancellation of a roughly $1 billion BADGER phased-array antenna systems contract in March contributed to the decline. Despite the headwinds, analysts expect revenue to grow 10.8% this year to $2.19 billion and 15% next year to $2.53 billion.
CEO Wahid Nawabi said customers are 'continuing to field autonomous capabilities at increasing scale,' and the company is prioritizing manufacturing capacity and supply chain strength. AeroVironment also disclosed new contracts, including a $468 million award for high-energy laser weapon systems, a $500 million precision strike and defensive systems contract, a $464 million space and directed energy contract, and a $117 million uncrewed aircraft system award.
Technical analysis shows AVAV is sitting at a crucial support level around $134 and has formed a triple-bottom pattern with a neckline at $207, suggesting a potential rebound toward the $200 psychological level.
