Investors will see just how efficient the stock market is on Thursday.
Shares of drone maker Aevex were up 10.76% in morning trading at $10.76, while S&P 500 and Dow Jones Industrial Average futures were off 1.1% and 0.7%, respectively.
That's great. But shares plunged almost 33% to $9.68 on Wednesday, after Bloomberg reported the Navy suspended purchases of its speedboats used to launch drones from the sea.
Aevex disputes that account, saying in a Wednesday news release that the story contained "factual inaccuracies."
"Contrary to reports that the U.S. Navy halted [Global Autonomous Reconnaissance Craft (GARC)] orders because of performance issues, no orders have been halted," the company said in the news release.
GARC is a BlackSea Technologies product, which Aevex recently bought for about recently bought for about $600 million. It's an autonomous boat that can provide intelligence, among other operational roles. The boats have been used recently in the Strait of Hormuz.
"The business successfully completed its contractual obligation having delivered 325 GARC units to the Navy in 2025. No additional GARC vessels were planned for procurement as the Navy deploys its existing GARCs across multiple different commands and missions," added the company.
"Our familiarity with GARC is limited, but we think management has a good foundation for its continued confidence and that Aevex should therefore recover a meaningful portion of the selloff," wrote JPMorgan analyst Seth Seifman in a Thursday report. He rates shares Buy. His most recent target price was $32.
"No changes to financial expectations," wrote RBC analyst Ken Herbert on Thursday. He kept his Buy rating and $22 price target, adding that the decline is a "buying opportunity."
Aevex even got a new Buy rating on Thursday from Oppenheimer analyst Patrick McCarthy. "Aevex has done what most other drone makers have not: delivered thousands of long-range strike systems into a heavily contested war, at volume and on time." His price target is $21 a share.
The market is supposed to discount all available information. To be sure, the Bloomberg report was a surprise, but the company's response and analysts' assessments suggest the selloff may have been overdone.
Of course, the market tends to be more efficient over the long run. Anything can happen from day to day. And there is a little more uncertainty. Investors hate uncertainty.
The decline left Aevex stock trading at 15 times earnings expected over the coming 12 months, down from a peak of 90 times in May. Wall Street projects roughly 40% annual earnings growth for the coming two years.
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