Is AeroVironment, Inc. overvalued or undervalued?

As of 4 March 2025, AeroVironment, Inc. has moved from a fair to an expensive valuation grade. The company is currently considered overvalued, with a P/E ratio of 263, significantly higher than the industry average. Additionally, the EV to EBITDA ratio stands at 123.74, further indicating a premium valuation relative to its earnings potential. The ROCE and ROE are notably low at 3.90% and 3.85%, respectively, which raises concerns about the company's efficiency in generating returns.
In comparison to its peers, AeroVironment's P/E ratio of 263 is considerably higher than Joby Aviation, Inc., which has a P/E ratio of -11.93, highlighting a stark contrast in valuation. The EV to EBITDA ratio for AeroVironment is also higher than Joby Aviation's -10.45, reinforcing the notion that AeroVironment is trading at a premium without corresponding financial performance. Despite a strong return of 132.19% over the past three years compared to the S&P 500's 58.74%, the current valuation metrics suggest that investors may be overestimating the company's future growth potential.