Drone Defense Company's Stock Increases by 58% in 5 Years

DroneShield Ltd. (DRO:ASX; DROSHF:OTC) has seen its stock value jump to new highs.

An article published on Yahoo! Finance revealed that the company's stock value has increased by 58% in the past five years and has a CAGR of 9.5%. This may not be a surprise for investors who have been paying attention since company's revenue increased by 49%.

"Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity," the article stated. 

Oleg Vornik, the CEO of DroneShield, responded to this praise with a statement, "DroneShield is well positioned in the rapidly growing counterdrone space, with world-leading technology, highly scaled production, and a substantive amount of devices deployed with customers globally today. We are the only publicly listed counterdrone company in the world, providing a unique investor exposure to this sector."

The company recently released its new Expeditionary Fixed-Site (EFS) Kit to supplement its DroneSentry-X Mk2 product by assisting with deployment and adapting the product to a range of environments.

This is by no means the only new product the company has released, as it put out an update for its AI drone detection system at the end of January. According to the company, this update will improve drone detection and user interface across all DroneShield products.

Increasing Demand for Drone Defense 

In a report from December 19, 2023, Lara Seligman and Matt Berg with Politico discussed demand among U.S. military officials for cost-effective ways to counter drone attacks, as naval missiles currently being used to counter drone attacks can cost as much as US$2.1 million, while small attack drones may only cost US$2,000.

Grand View Research estimated that the market for anti-drone technology was worth US$1,872.1 million in 2023 and should grow by 28.1% every year until 2030. The report estimated that the demand for anti-drone tech was driven by concerns about national security and global conflict.

Share Target Increased by 11%

Analysts and newsletter writers have had a number of good things to say about DroneShield.

Technical Analyst Clive Maund released an update on the company on February 3, 2024, where he advised investors looking to break into the stock, "it is therefore thought best for holders of the stock to stay long and for would-be buyers of DroneShield to watch for a period of consolidation with a possible near-term dip back to the low AU$0.50s or high AU$0.40s."

Clive Maund had previously reviewed the company on January 20, 2024, where he gave the same advice to "stay long." Maund believes that increasing global tensions are creating an increased demand for counter-drone technology.

Maund had commented on the company's stock, saying, "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 potential investors to look for dips in order to buy in or add more positions.

Analyst Daniel Laing with Bell Potter examined DroneShield on October 24, 2023, and rated the company as a "Buy" for investors, with a target share price of CA$0.45 and a potential return on investment of 58%. Laing cited a number of factors in his recommendation, including the company's year-to-date revenue increase of 59%.

Laing also stated that "The company very well could have a record year" due to the company's AU$400 million sales pipeline and AU $51 million backlog of orders.

On December 1, 2023, Laing restated his "Buy" rating and increased the target share price by 11% to AU$0.50 per share. A significant factor in his decision to increase the target share price seemed to be the company's acquisition of an AU$80 million contract.

The company's investor presentation reports that it has a 5-year target of AU$300-AU$500 million in annual revenue, and the company is planning to move into a larger facility.

Ownership and Share Structure

The company reports a cash balance of AU$58.9 million and a buffer of AU$400 million in its sales pipeline, as well as an order backlog of AU$30 million.

Management and insiders own 11% of the company, as 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, according to DroneShield.

The company reports that the largest independent investor, Charles Goode, owns 4.41% of the company with 21.5 million shares, while strategic investors own a total of 13.99% of the company.

Eprius Inc. is the second largest shareholder, with 3.16% of the company with 18.5 million shares.

In its February 2023 placement, Droneshield said that it brought ten new institutional investors on board, but it has not yet released more details.

The company reports that there are 612,153,611 million shares outstanding, while free float traded shares makeup 83.51% of traded shares, and the company has a market cap of AU$380 million.

Important Disclosures:

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. Amanda Duvall wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. 
3.  This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company. 

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