12:32 PM EDT, 06/25/2024 (MT Newswires) -- AeroVironment's ( AVAV ) focus in the fiscal Q4 results will be top-line growth, margin expansion, and initial fiscal 2025 guidance, RBC Capital Markets said in a note Monday.

The company is scheduled to release fiscal results June 26.

Analysts, including Ken Herbert, said the company has made "significant progress" in gaining more of the market share in key US defense programs with its Switchblade and small unmanned aircraft systems, or SUAS. However, shifting more towards loitering munitions might affect profit margins and could lower future investor expectations.

The analysts said that they expect discussions during AeroVironment's ( AVAV ) investor day, planned for day after the Q4 results, to primarily focus on changes in the competitive environment for loitering munitions, along with updates on contract awards and the medium-term Total Addressable Market outlook, including financial details.

Following recent contract announcements, the analysts expect management to discuss additional opportunities to boost revenue for fiscal 2025-26. Investors will likely be interested in details about the planned capital expenditure, expected around $30 million to $40 million, to increase production capacity.

"With the incremental contract announcements and the company's opportunity set across their loitering munition and SUAS portfolios, we believe sentiment will remain favorable," the analysts said.

RBC adjusted its price target on AeroVironment ( AVAV ) to $200 from $185, while keeping its outperform rating.

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