12:37 PM EDT, 06/27/2024 (MT Newswires) -- AeroVironment ( AVAV ) remains "well-positioned" to surpass revenue expectations for 2025, despite increased competition, however, focusing more on margins could affect investor sentiment negatively, RBC Capital Markets said.

Analysts, including Ken Herbert, said in a note Wednesday that the company reported "strong" fiscal Q4 results, and the highlight of the quarter was the Loitering Munition Systems, or LMS, segment, which grew by about 74%.

AeroVironment ( AVAV ) expects fiscal 2025 non-GAAP diluted EPS between $3.18 and $3.49 and revenue between $790 million and $820 million. Analysts polled by Capital IQ expect $3.31 and $809.7 million.

RBC said although the initial fiscal 2025 revenue guidance matched consensus expectations, the adjusted earnings before interest, taxes, depreciation, and amortization, or EBITDA, guidance was lower than anticipated.

Recently, the stock has faced pressure largely due to the significant Taiwan Foreign Military Sales authorization awarded to Anduril, standing at $300 million, compared with AeroVironment's ( AVAV ) smaller authorization at $60 million, the analysts said, adding that they believe the evolving competitive landscape will remain a focus for investors, and expect the company to provide further details at investor day on Thursday.

"We believe recent contract awards, which are not yet reflected in AeroVironment's ( AVAV ) fiscal Q4 backlog, will continue to support the elevated multiple on the stock, relative to historical ranges. We continue to view AeroVironment ( AVAV ) as strongly positioned in a fast-growing segment within defense, even as competitive pressures have increased," the analysts said.

RBC is maintaining its outperform rating and $200 price target on the company.

Shares of AeroVironment ( AVAV ) fell past 15% in recent trading.

Price: 163.73, Change: -29.08, Percent Change: -15.08