DroneShield (ASX:DRO) just landed a €2.8 million contract with Belgium for handheld drone jammers, a deal that neatly captures how rapid European demand for counter drone tech is relocating from trials to real deployment.
See our latest analysis for DroneShield.
The contract lands as DroneShield’s A$2.3 share price rides powerful momentum, with a 1 day share price return of 10.6 percent and year to date share price return above 200 percent. Its 1 year total shareholder return of roughly 274 percent and 5 year total shareholder return above 1,200 percent display how enthusiasm has steadily built despite bouts of shorter term volatility.
If this kind of defense tech story interests you, it is worth seeing what else is emerging across Europe and beyond by exploring aerospace and defense stocks.
With revenue and earnings surging, a deep sales pipeline and analyst tarobtains still sitting far above the current A$2.30 share price, is DroneShield an overviewed growth story, or are investors already paying up for tomorrow’s wins?
Most Popular Narrative: 55.3% Undervalued
Against DroneShield’s last close at A$2.30, the most followed narrative anchors fair value at more than double that level, implying substantial upside if its growth path holds.
Substantial ongoing investment in proprietary AI driven detection, sensor fusion, and subscription based (SaaS) offerings fortifies DroneShield’s margin profile and earnings quality. This enables premium pricing and recurring revenue streams as the business pivots beyond hardware only sales. Expanded global manufacturing capacity across Australia, Europe, and the U.S., combined with a diversified and growing international sales pipeline, positions the company to deliver on larger deal sizes and scale operations efficiently, supporting earnings leverage and margin improvement through economies of scale.
Want to see the math behind that ambitious valuation? The narrative leans on rapid revenue expansion, sharp margin lift, and a future earnings multiple usually reserved for market darlings. Curious which specific growth and profitability assumptions necessary to land for that upside to materialize? Dive in to uncover the projections driving this fair value.
Result: Fair Value of A$5.15 (UNDERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, stretched valuations and lumpy defense contracts mean that any delayed orders or missed growth tarobtains could quickly unwind expectations for DroneShield’s bullish narrative.
Find out about the key risks to this DroneShield narrative.
Another View: Market Ratios Flash Caution
While our fair value work suggests upside, DroneShield’s share price already bakes in a lot of optimism when you view at simple sales based ratios. It trades on a rich 19.6 times sales versus 4.2 times for the global Aerospace and Defense industest and 3.8 times for peers, and even above a 16.9 times fair ratio that the market could eventually gravitate toward.
That kind of gap can work both ways, amplifying gains if growth delivers, but also leaving little room for disappointment. How comfortable are you with paying tomorrow’s growth price today?
See what the numbers declare about this price — find out in our valuation breakdown.
Build Your Own DroneShield Narrative
If the story so far clashes with your own view, or you would rather trust your own digging, you can build a fresh narrative in minutes, Do it your way.
A great starting point for your DroneShield research is our analysis highlighting 2 key rewards and 4 important warning signs that could impact your investment decision.
Looking for more investment ideas?
Do not stop at one compelling story. Use the Simply Wall St Screener to uncover fresh opportunities that keep your portfolio one step ahead.
This article by Simply Wall St is general in nature. We provide commentary based on historical data
and analyst forecasts only applying an unbiased methodology and our articles are not intconcludeed to be financial advice. It does not constitute a recommconcludeation to purchase or sell any stock, and does not take account of your objectives, or your
financial situation. We aim to bring you long-term focapplyd analysis driven by fundamental data.
Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Simply Wall St has no position in any stocks mentioned.
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