Anti-Drone Co.'s New System Detects, Disrupts Unmanned Vehicles

Anti-drone defense company DroneShield Ltd. (DRO:ASX; DRSHF:OTC) has announced a new detection and adaptive disruption system for detecting and tracking multi-domain unmanned systems, the DroneSentry-X Mk2.

"The DroneSentry-X Mk2 can be mounted to standard vehicle roof racks, on military vehicles, surface vessels, and unmanned mobile platforms," the company said in a release. "It can also be deployed as a permanent or fixed site install on standard tripod masts or towers and supports local or remote operations."

DroneShield develops technologies to protect people, vehicles, and installations from unmanned aircraft systems (UAS). It provides artificial intelligence-based platforms for protection against drone threats and other hostile autonomous systems with products designed for a variety of terrestrial, maritime, and airborne platforms.

Its customers include military and intelligence community members, governments, law enforcement, critical infrastructure providers, and international airports.

The company provides both custom counter-drone and electronic warfare solutions and off-the-shelf products designed to meet a variety of terrestrial, maritime, and airborne requirements. Its more notable products include the DroneGun Tactical, DroneGun MK3, DroneGun MK4, DroneSentry, DroneSentry-C2, DroneSentry-X, and RfPatrol.

DroneSentry-X makes its debut this week at the Association of the United States Army Annual Meeting and Exposition (AUSA 2023) in Washington, D.C. Initial deliveries under received orders will start this month.

The Catalyst: 'Explosive Growth'

The company said it has seen "explosive growth" this year and has expanded its U.S. headquarters in Northern Virginia and added top talent to its team.

DroneShield secured an AU$33 million government sale, an AU$9.9 million 2-year R&D contract, an AU$40 million capital raise, and expanded to 90 employees spread across operations in both Sydney and Virginia. It has been working through an AU$62 million order backlog backed by an AU$200 million pipeline.

Peloton Capital analyst Darren Odel rated the stock Buy with an AU$0.84 per share target price.

Over the coming half decade, the company hopes to expand to employ some 120 to 150 staff supporting revenue of AU$300 million to AU$500 million per year, with roughly half of that income generated via software as a service (SaaS) and software R&D channels that are being developed alongside its manufacturing base.

"The recent capital raise has provided DroneShield the ability to build inventory in anticipation of material contracts (and fulfill smaller contracts faster) that are expected to close in the short to medium term," wrote Peloton Capital analyst Darren Odel.

Odell rated the stock Buy with an AU$0.84 per share target price.

Constantly Evolving Platform

DroneShield said the DroneSentry-X Mk2 is designed for deployment in harsh environments.

The web-based user interface allows for real-time analytics of detection activity with map overlay. Updates to its proprietary artificial intelligence/machine learning-driven detection engine mean the unit's capabilities can constantly evolve.

The DroneSentry-X Mk2 is also compatible with DroneShield's DroneLocator technology, providing drone and controller coordinates and altitude and velocity in real-time.

Technical Analyst Says 'Stay Long'

Several analysts and writers recommended the stock, including analyst Daniel Laing of Bell Potter Securities Ltd., who wrote that DroneShield was "on track for a big year."

"We remain bullish on the outlook for DroneShield, with this update pointing to a strong H1/23 setting up the foundation for a record year," Laing wrote.

Several analysts and writers recommended the stock, including analyst Daniel Laing of Bell Potter Securities Ltd., who wrote that DroneShield was "on track for a big year."

Technical Analyst Clive Maund published a piece about DroneShield In a piece titled "Stay Long on This Buy Rated Antidrone Co." In it Maund wrote, "We bought DroneShield Ltd. at good prices last year, having correctly calculated that the company had a bright future, and never sold it, but mostly lost interest this year when it ran off into a long correction."

Maund said he would normally not be interested in a stock that "has risen quite a lot toward a zone of resistance and that has almost 600 million shares in issue." But he said the stock had been "behaving like a young, dynamic stock," which implied "something big is in the offing."

"The business environment for the company has been completely transformed over the past year or two due to the war in Ukraine, which NATO seems determined to continue and expand, and the resulting big demand for drones and related paraphernalia looks set to continue to grow rapidly. We, therefore, stay long, and DroneShield is rated a Buy again here," Maund wrote.

Market Set to Grow By Billions

The global anti-drone market size is projected to reach US$3.8 billion by 2027 from US$1.47 billion in 2023, growing at a compound annual growth rate (CAGR) of 27.7% during the forecast period, analysis firm Markets and Markets predicted.

Technical Analyst Clive Maund published a piece about DroneShield In a piece titled "Stay Long on This Buy Rated Antidrone Co."

The key factors fueling the growth of this market include rising incidence of security breaches, growing use of drones to counter terrorism and prevent illicit activities, and increased adoption of counter drones for remote sensing, analysts said.

A recent report by Allied Market Research noted that "the global anti-drone market size was valued at US$1.3 billion in 2021 and is projected to reach US$14.6 billion by 2031, growing at a CAGR of 27.9% from 2022 to 2031."

Also, Fortune Business Insights reported that "the global anti-drone market size was valued at US$1.34 billion in 2021 and is projected to grow from US$1.58 billion in 2022 to US$6.95 billion by 2029, exhibiting a CAGR of 23.55% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with Anti-Drone experiencing higher-than-anticipated demand across all regions compared to pre-pandemic levels."

Ownership and Share Structure

Approximately 5.16% of the company is held by management and insiders. Charles Goode owns 3.66% with 21.50 million shares, CFO Carla Balanco owns 1.44% with 8.45 million shares, Angus Bean owns 1.26% with 7.39 million shares, Paul Jonathan Shaw owns 0.95% with 5.58 million shares, CEO Oleg Vornik owns 0.86% with 5.03 million shares, and Chairman Peter James owns 0.65% with 3.82 million shares.

Institutions own 8.31% of the company. Epirus Inc owns 3.15% with 18.50 million shares, SR Bennett Pty. Ltd. owns 0.91% with 5.35 million shares, and P & B Shaw FT CB Pty. Ltd. owns 0.59% of the company with 3.43 million shares.

There are 586.9 million outstanding shares, with 496.03 million free-float traded shares. The company has a market cap of US$98.53 million. It trades in a 52-week range of US$0.10 and US$0.34.

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1. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of DroneShield Ltd.
2. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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