Aerovironment Story

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AVAV -- USA Stock  

USD 111.11  6.00  5.12%

The next fiscal quarter end is expected on the 31st of January 2021. The stock still experiences an active upward rally. AeroVironment Debt to Equity Ratio is fairly stable at the moment as compared to the past year. AeroVironment reported Debt to Equity Ratio of 0.13 in 2020. Enterprise Value over EBIT is likely to climb to 46.00 in 2021, whereas Revenue Per Employee is likely to drop slightly above 374 K in 2021. While some of us are becoming more enthusiastic about industrials space, let's focus on AeroVironment in greater detail to make a better estimate of its debt utilization.
Published over a month ago
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Is AeroVironment (NASDAQ:AVAV) outlook still optimistic based on the latest debt level?
AeroVironment currently holds 13.45 M in liabilities with Debt to Equity (D/E) ratio of 0.03, which may suggest the firm is not taking enough advantage from borrowing. On a scale of 0 to 100, AeroVironment holds a performance score of 15. The firm shows a Beta (market volatility) of 0.8721, which signifies possible diversification benefits within a given portfolio. Let's try to break down what AeroVironment's beta means in this case. AeroVironment returns are very sensitive to returns on the market. As the market goes up or down, AeroVironment is expected to follow. Although it is vital to follow AeroVironment historical returns, it is good to be conservative about what you can do with the information regarding equity current trending patterns. The philosophy towards foreseeing future performance of any stock is to evaluate the business as a whole together with its past performance, including all available fundamental and technical indicators. We have found twenty-eight technical indicators for AeroVironment, which you can use to evaluate the performance of the firm. Please makes use of AeroVironment maximum drawdown, as well as the relationship between the expected short fall and rate of daily change to make a quick decision on whether AeroVironment price patterns will revert.
Aerovironment financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Aerovironment, including all of Aerovironment's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Aerovironment assets, the company is considered highly leveraged. Understanding the composition and structure of overall Aerovironment debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it.
Please read more on our technical analysis page.

Understanding Aerovironment Total Liabilities

Aerovironment liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Aerovironment has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on Aerovironment balance sheet include debt obligations and money owed to different Aerovironment vendors, workers, and loan providers. Below is the chart of Aerovironment short long-term liabilities accounts currently reported on its balance sheet.
You can use Aerovironment financial leverage analysis tool to get a better grip on understanding its financial position

How important is Aerovironment's Liquidity

Aerovironment financial leverage refers to using borrowed capital as a funding source to finance Aerovironment ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Aerovironment financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Aerovironment's total debt and its cash.

Another angle On Aerovironment

The latest price climb of AeroVironment could raise concerns from sophisticated investors as the firm it trading at a share price of 125.29 on 1,049,100 in volume. The company directors and management may have good odds in positioning the firm resources to exploit market volatility in February. The stock standard deviation of daily returns for 30 days investing horizon is currently 4.2. This high volatility is attributed to the latest market swings and not so good earnings reports for some of the AeroVironment partners.

Asset Breakdown

Assets Non Current
504.9 M
Current Assets
Total Assets592.85 Million
Current Assets504.94 Million
Assets Non Current87.92 Million
Goodwill24.79 Million
Tax Assets4.55 Million

Another 3 percent climb for AeroVironment

Semi variance is down to 2.13. It may cause a possible volatility fall. As of the 15th of January 2021, AeroVironment shows the Risk Adjusted Performance of 0.2817, mean deviation of 1.32, and Downside Deviation of 1.84. AeroVironment technical analysis gives you the methodology to make use of historical prices and volume patterns to determine a pattern that approximates the direction of the firm's future prices. Put another way, you can use this information to find out if the firm will indeed mirror its model of historical prices and volume momentum, or the prices will eventually revert. We were able to interpolate and analyze data for nineteen technical drivers for AeroVironment, which can be compared to its rivals. Please confirm AeroVironment standard deviation, maximum drawdown, as well as the relationship between the Maximum Drawdown and expected short fall to decide if AeroVironment is priced correctly, providing market reflects its regular price of 125.29 per share. Given that AeroVironment has jensen alpha of 0.3569, we suggest you to validate AeroVironment's prevailing market performance to make sure the company can sustain itself at a future point.

Our Final Takeaway

While some companies under the aerospace & defense industry are still a bit expensive, AeroVironment may offer a potential longer-term growth to sophisticated investors. The inconsistency in the assessment between current AeroVironment valuation and our trade advice on AeroVironment is due to the recent market swings and your selection of investing horizon. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to AeroVironment.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Vlad Skutelnik do not own shares of Aerovironment. Please refer to our Terms of Use for any information regarding our disclosure principles.

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