AeroVironment
AeroVironment
AVAV
0.7%
66%
- Trying to bounce from 21-day line, with a move above 102.87 offering early entry
- Working on 109.33 handle buy point in yearlong consolidation
Industry Group Ranking
Emerging Pattern
Pullback
A stock may pull back after a breakout, often to the 50-day line. A rebound from the first or second visit to the 50-day can be a buying opportunity, especially for existing holders to add some shares.
AeroVironment (AVAV) is the IBD Stock Of The Day as the maker of unmanned aircraft systems wins key contracts for "suicide drones" and recovery helicopters, amid the Ukraine war. Also, AVAV stock neared an early entry on Wednesday.
XShares of the defense contractor continue to work on a traditional buy point.
AVAV Stock Makes Key Move
In Wednesday market trading, AVAV stock bounced further off the 21-day exponential moving average, according to IBD MarketSmith charts, though in anemic volume.
AeroVironment would be actionable if it takes out the Monday high of 102.87. Shares closed up 0.3% to 101.90 Wednesday.
The defense stock has been consolidating since late April, following a sharp earnings-fueled rally in March. It shows a handle buy point of 109.33.
AeroVironment stock has been winging higher this year as investors cheer the drone maker's role in providing unmanned aircraft technology for domestic and foreign use.
Year to date, AVAV stock is up 18.8% vs. a 7.3% gain for the S&P 500 index.
AeroVironment Wins Amid Ukraine War
On May 2, AeroVironment announced a $10 million contract award by NASA's Jet Propulsion Laboratory to design and develop Mars Sample Recovery Helicopter flight systems.
On April 26, the company said it received an additional $64.6 million contract by the U.S. Army for Switchblade 300 loitering missile systems.
The new contract includes foreign military sales for the first time to France and another allied nation, expanding AeroVironment's international footprint, the company said.
In 2022, the U.S. government approved the tiny and lethal Switchblade systems for use by Ukraine after Russia invaded its neighboring country.
The Switchblade 300 weighs less than five pounds and can be launched in less than two minutes from a tube, providing real-time video intelligence from the air.
Dubbed a "kamikaze drone" or "suicide drone," the Switchblade loiters in the air until a target is identified, then acts as a precision-guided missile to deliver its deadly payload.
Strong IBD Ratings
According to the IBD Stock Checkup tool, AVAV stock earns an IBD Composite Rating of 83 out of a best-possible 99.
The Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
AeroVironment's 90 RS Rating means that it has outperformed 90% of all stocks in IBD's database over the past year.
Earnings have been volatile in recent quarters. Analysts polled by FactSet expect AeroVironment earnings to jump 65% per share in fiscal 2024, which just began in May.
That would follow what looks to be a flat 2023. AeroVironment hasn't reported fiscal Q4 results yet. Wall Street expects a big gain after fiscal Q3 earnings rose a mild 6% with revenue up 49%. That followed two quarters of mild losses.
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