DroneShield (DRO.ASX) was the 2nd most traded stocks in July 2024 by Sharesight Australian customers.
What are your thoughts on this company? What we’ve gathered from the market/experts:
Overview
DroneShield Limited (DRO) provides AI-driven platforms to protect against threats like drones and autonomous systems. They offer hardware and software to detect and safely neutralise small drones used for warfare, terrorism, contraband delivery, and airport disruptions. Clients include military, government, law enforcement, and critical infrastructure clients.
Bulls
- Large addressable market - US$10 billion
- Growth opportunities - Current geopolitical conflicts use drones extensively on all sides. 75% of revenues are derived from defence. Major growth opportunity into civilian airports, critical infrastructure, prisons, stadiums and corporates.
- Proprietary technology - all solutions except radars and cameras hardware fully developed in-house.
- Move to SaaS business model increases earning visibility - expected to become a significant portion of overall revenue over next 5 years.
- Significant sales pipeline of >$1.1 billion & $28 million contracted backlog (as at 15 Jul 2024)
- A network effect: counter-drone engineering experience & insights on industry dynamics of tier 1 military customers provide an opportunity to accelerate and enhance its AI software infrastructure and hardware capabilities.
Bears
- Sublime Funds Management’s director - Rodney Forrest, was quoted as saying, “Its valuation is wild.” (at $2.60 a share or $1.98B market cap)
- Long-term shareholders dilution risk from capital raise.
- High revenue concentration on government defence contract wins.
- Technology evolution and drone tech. Droneshield’s CEO Oleg Vornik cited “Technology evolution” as the biggest threat to DroneShield.