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DroneShield Limited (AU:DRO)
:DRO
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DroneShield Limited (DRO) AI Stock Analysis

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AU:DRO

DroneShield Limited

(OTC:DRO)

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Neutral 62 (OpenAI - 4o)
Rating:62Neutral
Price Target:
AU$3.50
▼(-6.17% Downside)
DroneShield Limited's overall stock score is driven by strong revenue growth and a robust project pipeline, as highlighted in the earnings call. However, the high P/E ratio and challenges in profitability and cash flow management weigh down the score. Technical indicators suggest mixed momentum, with short-term bearish signals but a longer-term uptrend.

DroneShield Limited (DRO) vs. iShares MSCI Australia ETF (EWA)

DroneShield Limited Business Overview & Revenue Model

Company DescriptionDroneShield Limited engages in the development, commercialization, and sale of hardware and software technology for drone detection and security worldwide. Its products include DroneGun Tactical, a countermeasure against a range of drone models; DroneGun MkIII, a compact, lightweight, and UAS countermeasure solution; DroneSim, a critical tool in the simulation, training, and testing of drone detection equipment and processes; DroneSentry-X, a cross-vehicle compatible, automated 360° detect and defeat device; and DroneSentry that integrates company's suite of sensors and countermeasures in a unified platform deployable in permanent or temporary installations. The company also offers DroneSentry-C2, a Command-and-Control (C2) system with functionality, including graphic user interface; and RfPatrol, a passive/non-emitting wearable UAS detection device that offers real situational awareness without distraction or complex operation. Its products are used by defense agencies; airports and other civil defense users; utilities, such as power plants, electricity grids, and gas pipelines; ports and other critical infrastructure asset owners; intelligence and national security agencies; prisons; stadiums and other public event venues and organizers; media production sites; real estate owners, including hotels, commercial offices, and manufacturing plants; and ultra-high net worth individuals and government officials. The company sells its products through third party distributors, as well as direct relationships with various customers. DroneShield Limited was founded in 2014 and is based in Sydney, Australia.
How the Company Makes MoneyDroneShield Limited generates revenue through the sale of its advanced drone detection and countermeasure systems. The company's revenue model primarily involves the direct sale of hardware and software solutions to government and defense agencies, critical infrastructure facilities, and commercial entities concerned with drone threats. Key revenue streams include the sale of stationary and portable detection devices, counter-drone equipment, and comprehensive security solutions that integrate with existing security systems. Additionally, DroneShield engages in partnerships and collaborations with defense contractors and technology companies to enhance its product offerings and expand its market reach. Service contracts, including maintenance and support, also contribute to its earnings, providing ongoing revenue opportunities beyond initial sales.

DroneShield Limited Earnings Call Summary

Earnings Call Date:Aug 26, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Mar 04, 2026
Earnings Call Sentiment Positive
The earnings call for DroneShield reflects a strong financial performance with record-breaking revenue growth and a robust project pipeline. The company is well-positioned in the rapidly expanding counter-drone market, supported by increasing geopolitical threats and defense spending. However, challenges remain in keeping pace with technological changes and navigating geopolitical and regulatory risks.
Q2-2025 Updates
Positive Updates
Record Revenue Growth
DroneShield reported a 210% increase in revenue for the first half of the fiscal year 2025 compared to the same period in 2024, achieving approximately AUD 72 million. The second quarter alone saw a 480% increase compared to the second quarter of 2024, with revenues reaching AUD 38.8 million.
Significant Pipeline Expansion
The company has a AUD 2.3 billion pipeline, which has increased by 112% over the first half of 2024. This includes 284 projects with several large deals, including 13 deals over AUD 30 million each.
SaaS Revenue Growth
SaaS revenue reached AUD 3.5 million for the first half, growing 177% compared to the first half of 2024. The company plans to expand its SaaS offerings to include drone defeat products and command and control systems.
Strong Gross Margins
DroneShield maintained a 70% gross margin across its product lines, highlighting strong profitability and differentiation in its offerings.
Positive Cash Flow
The company achieved positive cash flow in the second quarter of 2025, indicating strong financial health and operational efficiency.
Negative Updates
Challenges with Technological Advancement
There are ongoing challenges in staying ahead of rapidly evolving drone technologies, including the risk of stock redundancy and the need for continuous innovation in response to emerging threats.
Geopolitical Risks and Market Uncertainties
The company faces risks associated with geopolitical instability and potential market disruptions, which could impact operations and demand for its products.
Dependence on Regulatory Changes
The growth of the public safety market is contingent on regulatory changes, particularly in the U.S., where legislation currently limits the use of drone countermeasures by state and local law enforcement.
Company Guidance
During the DroneShield Second Quarter 2025 Investor Webinar, CEO Oleg Vornik and CFO Carla Balanco provided detailed guidance on the company's robust financial performance and strategic outlook. The company reported securing approximately AUD 72 million in revenue for the first half of 2025, marking a 210% increase compared to the same period in 2024, with the second quarter alone achieving AUD 38.8 million, a significant 480% rise from the previous year's second quarter. The total addressable market for counter-drone solutions is estimated at USD 10 billion, with DroneShield currently having a negligible market share. The company's SaaS revenue for the half-year was AUD 3.5 million, growing by 177% year-over-year. DroneShield's pipeline has grown to AUD 2.3 billion, reflecting a 112% increase from the previous year, with 284 projects in the pipeline and notable deals such as a AUD 62 million order in Europe. The company maintains approximately 70% gross margins and invests over AUD 50 million annually in R&D, supported by a strong cash balance. DroneShield is also expanding its production capacity globally, aiming for AUD 2.4 billion annual capacity and exploring potential value-adding acquisitions, with a focus on maintaining leadership in the counter-drone space.

DroneShield Limited Financial Statement Overview

Summary
DroneShield Limited shows strong revenue growth and a robust balance sheet with low leverage. However, profitability and cash flow management remain areas for improvement, with negative net income and volatile cash flows.
Income Statement
65
Positive
DroneShield Limited shows a strong revenue growth trend, increasing significantly over the years from 2019 to 2024. However, profitability is a concern with net income often negative and EBIT margins fluctuating. The company has managed to improve its gross profit margin over the years, but net profit margin remains under pressure, indicating challenges in cost management and operational efficiency.
Balance Sheet
72
Positive
The balance sheet is robust with a strong equity base and a low debt-to-equity ratio, indicating financial stability. The company has consistently maintained a high equity ratio, suggesting a low reliance on debt financing. This positions DroneShield Limited favorably for future growth despite historical losses.
Cash Flow
60
Neutral
Cash flows are volatile with negative free cash flow observed in recent years due to high capital expenditures. The company has managed to secure financing to bolster its cash position. However, the operating cash flow has been inconsistent, pointing to challenges in generating cash from its core operations.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue57.53M54.09M16.81M10.47M5.03M
Gross Profit41.24M38.95M11.83M7.62M3.20M
EBITDA-2.71M2.56M-2.36M-6.22M-6.89M
Net Income-1.32M9.33M-949.30K-5.31M-5.87M
Balance Sheet
Total Assets355.88M97.05M25.21M18.34M23.13M
Cash, Cash Equivalents and Short-Term Investments219.49M56.77M10.22M9.49M16.29M
Total Debt9.11M2.63M596.10K248.37K476.56K
Total Liabilities44.29M22.54M6.21M2.76M3.54M
Stockholders Equity311.59M74.51M19.00M15.58M19.59M
Cash Flow
Free Cash Flow-75.21M6.56M-2.58M-6.74M-5.42M
Operating Cash Flow-58.04M9.48M-1.75M-6.27M-4.65M
Investing Cash Flow-169.85M-1.95M-832.17K-467.45K-772.16K
Financing Cash Flow231.89M39.11M3.06M-122.03K16.30M

DroneShield Limited Technical Analysis

Technical Analysis Sentiment
Positive
Last Price3.73
Price Trends
50DMA
3.49
Positive
100DMA
2.72
Positive
200DMA
1.78
Positive
Market Momentum
MACD
0.06
Negative
RSI
62.17
Neutral
STOCH
88.45
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:DRO, the sentiment is Positive. The current price of 3.73 is above the 20-day moving average (MA) of 3.27, above the 50-day MA of 3.49, and above the 200-day MA of 1.78, indicating a bullish trend. The MACD of 0.06 indicates Negative momentum. The RSI at 62.17 is Neutral, neither overbought nor oversold. The STOCH value of 88.45 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AU:DRO.

DroneShield Limited Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
62
Neutral
AU$3.26B460.492.19%61.31%-34.15%
48
Neutral
AU$7.67M-0.388.64%-19.82%
45
Neutral
AU$19.00M-2.89-3.43%-40.65%
63
Neutral
$10.79B15.437.44%2.01%2.89%-14.66%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AU:DRO
DroneShield Limited
4.40
3.04
222.34%
AU:DWG
IXUP Ltd.
0.08
-0.22
-73.33%
AU:ASV
Asset Vision
0.04
0.01
33.33%
AU:AMX
Aerometrex Ltd.
0.20
-0.12
-37.50%
AU:TAL
HSC Technology Group Ltd.
0.09
-0.01
-10.00%

DroneShield Limited Corporate Events

DroneShield Surpasses 4,000 Systems Sold with $7.9 Million U.S. Defense Contracts
Sep 17, 2025

DroneShield Limited has announced surpassing 4,000 systems sold globally, with new contracts totaling $7.9 million for handheld systems to be delivered to the U.S. Department of Defense. This milestone underscores DroneShield’s position as a trusted provider in the counter-drone industry, reflecting sustained end-user confidence and the effectiveness of its solutions. The company reported a record revenue of $72.3 million for the first half of 2025, indicating rapidly rising demand for its products. DroneShield’s production capabilities are supported by a robust Australian supply chain, and the company plans to expand its manufacturing to the U.S. and Europe by 2026 to further boost sales in those regions.

The most recent analyst rating on (AU:DRO) stock is a Hold with a A$3.50 price target. To see the full list of analyst forecasts on DroneShield Limited stock, see the AU:DRO Stock Forecast page.

DroneShield Misses Out on Major Defence Contract
Sep 10, 2025

DroneShield Limited announced that it was not selected by the Australian Department of Defence as the Systems Integration Partner for Project LAND 156, a contract valued at $45.9 million. This decision, disclosed in response to an ASX inquiry, may impact DroneShield’s market positioning and investor perceptions, as the project represents a significant opportunity in the counter-drone sector.

The most recent analyst rating on (AU:DRO) stock is a Buy with a A$3.70 price target. To see the full list of analyst forecasts on DroneShield Limited stock, see the AU:DRO Stock Forecast page.

DroneShield Limited Announces Change in Substantial Holding
Sep 2, 2025

DroneShield Limited has announced a change in substantial holding, as State Street Corporation and its subsidiaries have ceased to be substantial holders as of August 29, 2025. This change in holding could impact DroneShield’s shareholder structure and influence within the market, potentially affecting its strategic decisions and stakeholder interests.

The most recent analyst rating on (AU:DRO) stock is a Buy with a A$3.70 price target. To see the full list of analyst forecasts on DroneShield Limited stock, see the AU:DRO Stock Forecast page.

DroneShield Misses LAND 156 SIP Contract but Sees Strong Demand
Aug 28, 2025

DroneShield Limited announced that it was not selected as the Systems Integration Partner for the Australian Department of Defence’s LAND 156 project, a contract awarded to Leidos Australia. Despite this, DroneShield has previously secured contracts under the initial phase of the program and remains optimistic about future opportunities within the $1.3 billion project. The company continues to experience strong demand for its counterdrone technology, evidenced by record revenues and profits, and a significant sale to a European customer. DroneShield’s technology is actively used by Ukrainian forces and over 30 militaries and law enforcement agencies globally, highlighting its effectiveness in high-threat environments.

The most recent analyst rating on (AU:DRO) stock is a Buy with a A$3.70 price target. To see the full list of analyst forecasts on DroneShield Limited stock, see the AU:DRO Stock Forecast page.

DroneShield Reports Record Revenue and Expands Project Pipeline in 2025
Aug 27, 2025

DroneShield Limited has reported a significant increase in its financial performance for the first half of 2025, with a 210% rise in revenue compared to the previous year, marking its highest revenue period to date. The company has also seen substantial growth in its project pipeline and workforce, positioning itself strongly for future expansion and continued investment in research and development to address evolving drone threats.

The most recent analyst rating on (AU:DRO) stock is a Hold with a A$4.00 price target. To see the full list of analyst forecasts on DroneShield Limited stock, see the AU:DRO Stock Forecast page.

DroneShield Achieves Record Revenue and Expands Global Reach
Aug 27, 2025

DroneShield Limited reported record-breaking financial results for the first half of 2025, with a 210% increase in revenue to $72.3 million and a profit after tax of $2.1 million. The company is experiencing strong momentum into the second half of the year, driven by a significant contract and growing demand for its counterdrone solutions. DroneShield is expanding its production capacity and workforce to support its growth, with plans to scale manufacturing to $2.4 billion annually by 2026. The company’s strategic focus on AI-driven technology and global market expansion positions it for continued leadership in the counterdrone sector.

The most recent analyst rating on (AU:DRO) stock is a Hold with a A$4.00 price target. To see the full list of analyst forecasts on DroneShield Limited stock, see the AU:DRO Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Sep 18, 2025