DroneShield Ltd. (ASX:DRO; DRSHF:OTC) announced in a press release on January 21, 2023, that it has released an update for its AI drone detection system, RFAI, across its selection of counter-drone products.
The company reports that this update is relevant to all of the company's products and will provide greater accuracy, as "emitter detection accuracy and tracking is improved by up to 25% in situations when there are multiple emitters present," will enable products to process NMEA data for better positioning, and improve the company's DroneLocator Intelligence technology. The company also stated that it will provide updates to the user interface, and products will now be able to display coordinates in GCS or MGRS, and will be able to download system diagnostics.
Oleg Vornik, the CEO of DroneShield, commented, "As drones continue to evolve rapidly, there is an ongoing race to detect and respond to those threats. Firmware upgrades enable our global community of customers to deal with the latest threats, and we actively collaborate with our end users to receive the latest field intelligence to base our algorithms on." He continued, "These updates (together with our computer-vision AI engine and the sensor-fusion engine) grow our SaaS subscriber base, and we are expected to become a major driver of DroneShield revenue over coming years."
Militaries Searching for Counter-Drone Tech
As drones have become an increasingly large part of modern conflict, governments have been seeking out counter-drone technology. According to a Politico report from December 19, 2023, drone attacks have cost the U.S. Navy millions of dollars, as conventional intercept missiles can cost US$1.8 million dollars per use. This is a significant cost, especially compared to the drones they are defending against, which cost an estimated maximum of US$2,000.
McAlinden Research reported in October of 2023 that there had been considerable interest in counter-drone technology from NATO, which was preparing to publish a counter-drone doctrine at the time.
According to McAlinden, the U.S. military has awarded contracts worth as much as several hundred million dollars, representing a significant opportunity for companies that can secure contracts.
Poised for Growth
Technical Analyst Clive Maund reviewed the company positively on January 20, 2024. Maund examined the company's stock patterns and stated, "Price/volume action in DroneShield is very bullish indeed, and the fundamental outlook for the company could scarcely be better. It is therefore believed to be just beginning a major bull market that should take it to much higher levels." Maund advised investors to be patient and hold on to their shares.
Analyst Daniel Laing with Bell Potter reviewed the company as a "Buy" for investors, and increased its target share price to AU$0.50. Laing cited the company's increase in sales to AU$400 million, the acquisition of a contract worth AU$80 million, and the company's expansion goals.
The company's investor presentation has a number of catalysts to report, including a move to a larger facility in 2024, and an expectation that it will bring in AU$300 to AU$400 million production capacity for the company.
Ownership and Share Structure
Streetwise Ownership Overview*
DroneShield has a cash balance of AU$57.9 million, buffered by an AU$30 million order backlog and AU$400 million in the company's sales pipeline.
Reuters provided a breakdown of the company's ownership and share structure, where management and insiders own approximately 11% of the company. According to Reuters, CFO Carla Balanco owns 1.44% of the company with 8.45 million shares, CEO Oleg Vornik owns 1.40% of the company with 8.18 million shares, CTO Angus Bean owns 1.26% of the company with 7.39 million shares, and Non-Executive Chairman Peter James owns 1.09% of the company with 6.40 million shares.
Strategic investors hold 13.99% of the company, stated Reuters and the largest independent investor Charles Goode holds 4.41% of the company with 21.5 million shares.
The second largest single shareholder is Eprius Inc., which holds 3.16% of the company with 18.5 million shares.
The company reports that it introduced ten institutional investors during its February 2023 placement and has not yet released further details.
There are 612,153,611 million shares outstanding, and free float traded shares comprise 83.51% of traded shares, while the company has a market cap of AU$110.32 million.
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- 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.].
- [Amanda Duvall]wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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