AeroVironment stock price sinks as risky patterns emerge: can it hit $170?

AeroVironment stock price continued falling on Monday as the recent guidance disappointed. AVAV dropped by over 2.4% in the pre-market, down by 55% from its highest point in 2025. Its market capitalization has slumped from over $19 billion on October 9 last year to the current $9.87 billion.

AeroVironment faces major challenges despite war headwinds 

AVAV stock price has remained in a bear market in the past few months, a trend that accelerated this month after the company published its financial results.

The most recent results showed that its business did well in the third quarter even as the space business continued to underperform.

Its revenue came in at $408 million, up by 38% from the same period last year. Its autonomous systems revenue jumped to $279 million, while its Space, Cyber, and Directed Energy (SCDE) made over $408 million. 

The latter was the main laggard, which happened because of the stop-order on the Space SCAR program and the ongoing delays in the release of government funds. This delay pushed the company to announce a large impairment of goodwill of over $159 million.

AVAV stock has also crashed after the management delivered a weak forward guidance, citing its SCDE business. It now expects that its annual revenue will be between $1.85 billion and $1.95 billion. 

The company also reduced its adjusted EBITDA guidance because of these challenges. It expects that the figure will be between $265 million and $285 million, while its earnings per share (EPS) will be between $2.75 and $3.10, also lower than what analysts were expecting.

On the positive side, the ongoing Iran war has demonstrated the power of drones in modern-day warfare. As a result, orders for its drones has continued rising, bringing its backlog to over $1 billion.

The company received a $186 million order from the army. This order will see it deliver the Switchblade 600 Block 2 and Switchblade 300 Block 20. Earlier this month, the company received a $97 million order to deliver the next-generation sensor testing solutions.

AeroVironment is also increasing its business in the unmanned aircraft industry. It recently acquired ESAero in a $200 million deal, which will contribute positively to the EBITDA in the first year of full integration.

AeroVironment stock price forecast: Technical analysis

AVAV stock chart | Source: TradingView

The daily timeframe chart shows that the AVAV stock price has crashed in the past few months. This retreat started when the stock formed a double-top pattern at $416 and a neckline at $227, its lowest level on December 17th. A double-top is one of the most common bearish reversal signs in technical analysis.

The stock has now formed a death cross pattern, which happens when the 50-day and 200-day Exponential Moving Averages (EMA). This cross happened on March 10, the same day that it reported its earnings, which missed analysts estimates.

AVAV stock has remained below the Supertrend and the Ichimoku cloud indicators, while the Relative Strength Index (RSI) is nearing the oversold level of 30.

Most notably, it has dropped below the 61.8% Fibonacci Retracement level, where most reversals normally happens. Therefore, the most likely scenario is where the stock continues 

The post AeroVironment stock price sinks as risky patterns emerge: can it hit $170? appeared first on Invezz