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Here's Why AeroVironment Should be Part of Your Portfolio

Shares of AeroVironment Inc. AVAV have been gaining momentum over the last 12 months and have returned 30.5% compared with the Zacks categorized Aerospace- Defense Equipment Industry gain of 20.2%. Long-term earnings growth of the company is currently pegged at 15.0%.



AeroVironment reported a positive earnings surprise of 31.31% in fourth-quarter fiscal 2017. The company exited fiscal 2017 with a funded backlog of $78 million, which was up 18.4% year over year. This indicates growing demand for its products.

Proper execution of its strategic plans, domestic demand for its family of Tactical Missile Systems (TMS) and international demand for its family of small unmanned aircraft systems drove the top line in fiscal 2017 and is expected to drive its performance going forward.

The strategic investment made by the company has started to yield results. The investments made to build its TMS business continue to benefit the company. In fiscal 2011, TMS revenues were about $6 million. It has touched $75 million in fiscal 2017. TMS revenues currently account for 29% of total revenue and expect to contribute even more in 2018.

The company, with its advanced product portfolio, is poised well to gain from the federal government fiscal 2018 budget request, which includes procurement of line items associated with AeroVironment solutions.

In addition, expanding international customer base and increasing demand for its Unmanned Aircraft Systems are going to drive the performance of the company.

The Zacks Consensus Estimate for the company has moved up 4.2% to 50 cents for fiscal 2018 in the last 30 days.

Zacks Rank & Other Stocks to Consider

AeroVironment currently sports a Zacks Rank #1 (Strong Buy). Other top-ranked stocks in the same space worth considering are Curtiss-Wright Corporation CW, Heico Corporation HEI and Raytheon Company RTN. All of them carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Curtiss-Wright Corporation reported an average positive earnings surprise of 5.11% in the last four quarters. Its 2017 Zacks Consensus Estimate has moved up 2.5% in last 90 days to $4.48 per share.

Heico Corporation reported an average positive earnings surprise of 5.76% in the last four quarters. Its 2017 Zacks Consensus Estimate has moved up 1.5% in last 90 days to $2.07 per share.

Raytheon Company reported an average positive earnings surprise of 5.16% in the last four quarters. Its 2017 Zacks Consensus Estimate has moved up 1.4% in last 90 days to $7.48 per share.

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AeroVironment, Inc. (AVAV): Free Stock Analysis Report
 
Curtiss-Wright Corporation (CW): Free Stock Analysis Report
 
Heico Corporation (HEI): Free Stock Analysis Report
 
Raytheon Company (RTN): Free Stock Analysis Report
 
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