DroneShield Ltd. (DRO:ASX; DRSHF:OTC) posted a record Q2/23 and is "on track for a big year," reported Bell Potter analyst Daniel Laing in a July 26 research note.
"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.
Bell Potter's price target on the Australian company is unchanged, at AU$0.45 per share, noted Laing. DroneShield's current price is about AU$0.315 per share. The gap between these prices implies a significant potential return of 44%.
Laing reiterated that investors could expect the share price to move when DroneShield starts rolling out its counterdrone technology at U.S. military bases, which it plans to do this year.
DroneShield remains a Buy.
Well Cashed Up
During Q2/23 DroneShield received AU$8.2 million ($8.2M) in cash from customers. This was 200% more than cash receipts in the same period last year.
The AU$8.2M took total cash receipts for H1/23 to AU$15.3M. At the end of Q2/23, the company had AU$42.4M in cash.
"On the back of the recent AU$9.9M research and development (R&D) contract and AU$33M U.S. government contract, DroneShield has a record AU$62M contracted order backlog, with a sales pipeline of over AU$200M," wrote Laing.
Few Estimates Revised
After DroneShield reported its Q2/23 results, Bell Potter updated certain numbers in its model on the company accordingly.
For one, Bell Potter pushed back its estimated time to the end of H2/23 from the end of H1/23, by which the DroneShield will have more substantively increased its inventory.
Also, Bell Potter increased its estimate of the R&D tax incentive to AU$2.4M from AU$3M. Now, after the change, net profit after tax is forecasted to be about AU$20.1M.
None of these changes affected Bell Potter's target price on DroneShield.
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Important Disclosures:
- 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.
- Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
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Disclosures for Bell Potter, DroneShield Ltd., July 26, 2023
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