What happened

Investors have now had 24 hours to digest the AgEagle Aerial Systems (UAVS -3.41%) earnings report, and they still aren't finding much to get excited about. The stock traded down as much as 10% on Wednesday morning, its second straight day in the red following the release of second-quarter results.

So what

The maker of small, agriculture-focused drones burst onto the scene last year, going from penny stock status valued by the market at less than $10 million to a nearly $1 billion market capitalization at its high on rumors the company was working with Amazon on a retail delivery drone. AgEagle neither confirmed nor denied those rumors, saying it has collaborated with a major retailer but holding off on specifics or identifying who that retailer was.

A drone flies over a field.

Image source: Getty Images.

This week's earnings report appears to have poured a cold dose of reality on those dreams about what the business could become. As my colleague Neha Chamaria explains, the company generated just $1.94 million in revenue during the entire quarter. And management said it's relationship with that "high-profile e-commerce customer" is no longer a factor.

While it is possible there could be future drone development opportunities with other retailers down the line, it appears the primary reason investors caused the stock to rally is at least for now off the table.

Now what

AgEagle shares have now lost nearly 80% of their value since mid-February. That's a brutal decline, but if anything I'm shocked it hasn't fallen further.

UAVS Chart

UAVS data by YCharts

Even at current prices the company is trading at nearly 40 times annualized sales despite, as Chamaria notes, generating nearly no organic growth. The company also notified the Securities and Exchange Commission that it would need extra time to file its 10-Q quarterly report.

Add it all up, and there isn't a lot to justify AgEagle's $300 million market capitalization. Investors should resist the temptation to go bargain hunting despite the stock's sharp decline.