Why Aerovironment's Shares Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of drone and electric car charger maker Aerovironment (Nasdaq: AVAV  ) jumped 13% today after the company announced fiscal second-quarter earnings.

So what: The company reported a slight decline in revenue to $80.3 million, but earnings rose 32% to $8.7 million, or $0.39 per share. Analysts expected revenue of $77.1 million and earnings of $0.22 per share.  

Management also said fiscal 2013 revenue will be between $348 million and $370 million and earnings will be $1.41 to $1.51 per share.

Now what: The full-year guidance was ahead of estimates, so investors are becoming more confident in the future. There's concern that drone orders will decline as the military cuts spending because of the budget deficit. That fear appears to be mitigated for the time being.

The stock still isn't cheap, and I'd rather be a buyer on a pullback to near $20, but long term, I still think Aerovironment is in a strong position.

Interested in more info on Aerovironment? Add it to your watchlist by clicking here.


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