Why AeroVironment Stock Crashed 27% in March

Shares of AeroVironment (NASDAQ: AVAV) had a pugnacious period successful March, falling arsenic overmuch arsenic 27.4%, according to information supplied by S&P Global Market Intelligence.

The catalyst that sent the drone shaper little was the fallout from its anemic net study and the nonaccomplishment of a cardinal contract.

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For the company's fiscal 2026 3rd 4th (ended Jan. 31), AeroVironment reported gross of $408 million, up 143% twelvemonth implicit year. The acquisition of aerospace institution BlueHalo accounted for overmuch of that increase, arsenic integrated maturation accrued 38%.

The company's nonaccomplishment ballooned to $179 million, compared to a nonaccomplishment of $3 cardinal successful the prior-year quarter, resulting successful adjusted net per stock (EPS) of $0.64.

For context, analysts' statement estimates were calling for gross of $476 cardinal and EPS of $0.68, truthful AeroVironment missed by a state mile.

The accrued nonaccomplishment was chiefly the effect of a $151.3 cardinal goodwill impairment complaint (more connected that successful a minute) and a $43.9 cardinal complaint to intangible amortization and different non-cash related charges.

AeroVironment besides reported bookings of $2.1 cardinal and had a book-to-bill ratio of 1.6 for the archetypal 9 months of fiscal 2026. Moreover, the institution reported a grounds funded backlog of $1.1 billion.

While the results were solid, atrocious quality lurked successful the shadows. AeroVironment had a $1.7 cardinal declaration with the U.S. Space Force to physique the Broad Area Deployable Ground Terminal Enabling Resilient communications (BADGER) phased-array antenna strategy to enactment the Satellite Communication Augmentation Resource (SCAR). Management was moving to renegotiate the presumption of the woody to let the institution to make a commercialized marketplace for the antenna.

After failing to scope an agreement, Space Force terminated the deal. AeroVironment is moving to recompete and plans to taxable a projected solution nether the new, revised requirements. Management believes the institution has developed "an innovative and compelling solution that is unmatched successful the industry," which volition pb to a "more flexible and profitable business," but lone if it tin beryllium sold commercially arsenic well. This was the catalyst for the $151 cardinal writedown.

This led absorption to little its full-year guidance. AeroVironment present expects gross successful a scope of $1.85 cardinal to $1.95 billion, down from a scope of $1.95 cardinal to $2 billion, chiefly driven by the nonaccomplishment of the Space Force contract.