AeroVironment Stock (AVAV) Tests Support Ahead of Earnings – What To Expect

AeroVironment's stock price (NASDAQ: AVAV) is trading at $280.92, down 0.55% early in the day, with earnings awaiting after market close. The current price action sees AVAV testing support levels ahead of its earnings release, having pulled back 31% from recent highs.

Analysts are looking for an EPS of $0.79 on the quarter, for a huge 80%+ increase from the EPS reported in the same quarter last year ($0.47). Revenue projections are equally bullish, with the expected $465.63 million, a 147% increase Y/Y.

From a technical perspective, AeroVironment's stock price is currently below its 50-day Simple Moving Average (SMA) of $336.14, but above its 200-day SMA of $232.67. This suggests what you can see in the chart, short-term bearishness but a longer-term bullish trend.

Looking at recent operational developments, AeroVironment was selected for the U.S. Army's Next-Generation Counter-Unmanned Aircraft System (C-UAS) missile program in October. The $95.9 million contract involves supplying its Freedom Eagle (FE-1) missile for the Long-Range Kinetic Interceptor (LRKI) program. The FE-1 promises increased lethality and extended range for C-UAS missions.

Further bolstering its market position, AeroVironment signed a Memorandum of Understanding with Korean Air, designating the airline as its priority partner in the Republic of Korea. This collaboration aims to integrate AeroVironment's JUMP 20 Group 3 Vertical Takeoff and Landing (VTOL) fixed-wing Medium Unmanned Aircraft Systems (MUAS) into Korean defense operations.

The company also expanded its Tomahawk line with the Grip TA5 Tactical Controller, selected as the Dismounted Common Controller (DCC) for the U.S. Army's RCCTO Human-Machine Integrated Formations project. This controller integrates with Samsung Tab Active5 Tactical Edition tablets, enabling real-time control of multiple robotic assets.

AeroVironment's partnership with Arkeus to integrate the Hyperspectral Optical Radar (HSOR) payload into its JUMP 20 uncrewed autonomous system further demonstrates its commitment to innovation. This collaboration aims to enhance the capabilities of the JUMP 20 platform through advanced hyperspectral imaging technologies.

Given the strong growth expectations and positive developments, a beat on earnings could propel the stock higher, potentially testing resistance near the 50-day SMA. Conversely, a miss could lead to further downside, potentially testing lower support levels around the $265 mark.

Despite the recent pullback in the stock, AVAV remains a significant outperformer YTD, up 79.35% since the turn of the year. Bulls will be looking for a print that gets the stock back motoring upwards, whilst bears will be looking to retest lower levels in the sessions ahead. Who will get their way will become clearer in a few hours.