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Why AeroVironment (AVAV) Stock Is Up After-Hours Tuesday

Stocks in this article: AVAV

NEW YORK (TheStreet) -- AeroVironment (AVAV) was gaining 6.6% to $33.00 after-hours Tuesday after beating analysts' expectations for earnings and revenue in the fourth quarter.

The company reported EPS of 27 cents a share for the fourth quarter, beating the Capital IQ Consensus Estimate of 23 cents a share by 4 cents. Revenue grew 35.8% from the year-ago quarter to $73.5 million, beating analysts' estimates of $69.62 for the quarter.

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TheStreet Ratings team rates AEROVIRONMENT INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

"We rate AEROVIRONMENT INC (AVAV) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and increase in net income. However, as a counter to these strengths, we find that the company's return on equity has been disappointing."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 3.2%. Since the same quarter one year prior, revenues rose by 47.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • AVAV has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 6.24, which clearly demonstrates the ability to cover short-term cash needs.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Aerospace & Defense industry and the overall market, AEROVIRONMENT INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: AVAV Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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