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DroneShield Limited
(Sydney:DRO)
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Rating:58Neutral
Price Target:
AU$2.00
▲(2.56% Upside)
Action:Reiterated
Date:08/27/26
The score is primarily supported by improved financial performance and a strong, low-leverage balance sheet, including the 2025 step-change in revenue and return to net profitability. This is meaningfully offset by weak technicals (price below all key moving averages with negative momentum) and an unsupportive valuation signal (negative P/E and no dividend yield provided).
Positive Factors
Step-change in revenue
The sharp increase in annual revenue indicates stronger customer adoption and a larger operating scale. Sustaining this demand across defense, government, and critical-infrastructure customers could improve fixed-cost absorption and support further business development.
Negative Factors
Material gross-margin compression
The substantial margin decline suggests pressure from product mix, pricing, or delivery costs. If this persists as revenue expands, growth may generate less incremental profit and could limit the company’s ability to fund development and scale operations internally.
Read all positive and negative factors
Positive Factors
Negative Factors
Step-change in revenue
The sharp increase in annual revenue indicates stronger customer adoption and a larger operating scale. Sustaining this demand across defense, government, and critical-infrastructure customers could improve fixed-cost absorption and support further business development.
Read all positive factors
DroneShield Limited (DRO) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$1.62B
Dividend YieldN/A
Average Volume (3M)7.74M
Price to Earnings (P/E)―
Beta (1Y)2.22
Revenue Growth153.40%
EPS Growth-513.58%
CountryAU
Employees500
SectorIndustrials
Sector Strength72
IndustryAerospace & Defense
Share Statistics
EPS (TTM)-0.03
Shares Outstanding925,219,700
10 Day Avg. Volume6,642,846
30 Day Avg. Volume7,742,435
Financial Highlights & Ratios
PEG Ratio-2.97
Price to Book (P/B)8.43
Price to Sales (P/S)13.11
P/FCF Ratio307.22
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
AU$1.99Price Target Upside1.92% Upside
Rating ConsensusHold
Number of Analyst Covering4
EPS Forecast (FY)-0.03
Revenue Forecast (FY)AU$260.10M
DroneShield Limited Business Overview & Revenue Model
Company Description
DroneShield Limited engages in the development, commercialization, and sale of counter-drone hardware and software technology in Australia, the United States, Europe, Asia, the United Kingdon, and internationally. It provides DroneSentry-C2, a com...
How the Company Makes Money
DroneShield makes money primarily by selling counter‑UAS products and integrated solutions to customers such as defense forces, government agencies, law enforcement, and operators of critical infrastructure. Key revenue streams include: (1) Produc...
DroneShield Limited Earnings Call Summary
Earnings Call Date:Feb 24, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Feb 23, 2027
Earnings Call Sentiment Positive
The call presented multiple strong operational and financial positives: substantial YoY revenue/cash receipt growth (~4x), accelerated SaaS revenue (from ~$3M to ~$12M with >$18M locked for 2026), a large $2.1B pipeline, high gross margins (~65%), significant R&D investment ($70M+), operational reliability and manufacturing scale plans. Offsetting risks are a trimmed near‑term pipeline driven by conservative assumptions in the U.S. civilian market (pipeline down ~12.5%), timing dependency on U.S. budget/IDIQ processes, pending profit detail, executive stock sales that attracted scrutiny, and continued high fixed investments. Overall, the highlights materially outweigh the lowlights given the magnitude of revenue and backlog growth, balance‑sheet strength and clear product differentiation, supporting a positive outlook.Positive Updates
Substantial Revenue and Cash Receipts Growth
Reported about $202 million in customer cash receipts and described top-line results as roughly just under 4x the prior year (approximately a multi‑hundred percent YoY increase). The company also began the year with roughly $100 million of carry‑over locked revenue versus $5–10 million this time last year, indicating a large improvement in forward‑looking secured revenues.
Negative Updates
Pipeline Trimmed (US Civilian Conservative Re‑assessment)
Pipeline fell from roughly $2.4 billion three months ago to $2.1 billion (~$300M reduction, ≈12.5% decline) after management applied more conservative assumptions to U.S. civilian (non‑military, non‑law‑enforcement) opportunities due to nascent adoption and slower follow‑on projects.
Read all updates
Q4-2025 Updates
Positive
Negative
Substantial Revenue and Cash Receipts Growth
Reported about $202 million in customer cash receipts and described top-line results as roughly just under 4x the prior year (approximately a multi‑hundred percent YoY increase). The company also began the year with roughly $100 million of carry‑over locked revenue versus $5–10 million this time last year, indicating a large improvement in forward‑looking secured revenues.
Read all positive updates
Company Guidance
Management did not give formal FY26 revenue guidance but said it expects a “very meaningful” multi‑fold increase over FY25, noting the business entered 2026 with roughly $100M of contracted/locked cash receipts, reported about $202M of customer cash receipts in the latest period (≈4x year‑earlier), and started the year with a healthy cash balance (~$200M). Key metrics highlighted: a $2.1B pipeline (down from ~$2.4B three months prior) across ~300 deals; SaaS growth from just under $3M in 2024 to just under $12M in 2025 and >$18M already locked for 2026 with a target to grow software from ~5% to ~30% of revenue; R&D spend >$70M; ~350 hardware/software engineers (company headcount ~500, planned ~600 by end‑26); target gross margin ~65%; run‑rate cash costs ~$150M; and manufacturing capacity expansion (aiming to support ~$2.4B of output by year‑end) with rapid delivery capability demonstrated on $62M and other orders.DroneShield Limited Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
85
Very Positive
Cash Flow
60
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 269.99M | 216.55M | 57.53M | 54.09M | 16.81M | 10.47M |
| Gross Profit | 70.35M | 108.33M | 41.24M | 38.95M | 11.83M | 7.62M |
| EBITDA | -22.21M | 6.54M | -2.71M | 2.56M | -1.94M | -5.88M |
| Net Income | -30.83M | 3.52M | -1.32M | 9.33M | -949.30K | -5.31M |
Balance Sheet | ||||||
| Total Assets | 425.76M | 412.19M | 355.88M | 97.05M | 25.21M | 18.34M |
| Cash, Cash Equivalents and Short-Term Investments | 178.48M | 209.49M | 219.49M | 56.77M | 10.22M | 9.49M |
| Total Debt | 16.65M | 14.26M | 9.11M | 2.63M | 596.10K | 248.37K |
| Total Liabilities | 117.65M | 75.57M | 44.29M | 22.54M | 6.21M | 2.76M |
| Stockholders Equity | 308.12M | 336.62M | 311.59M | 74.51M | 19.00M | 15.58M |
Cash Flow | ||||||
| Free Cash Flow | 4.96M | 9.24M | -64.40M | 7.75M | -2.58M | -6.74M |
| Operating Cash Flow | 22.10M | 24.07M | -58.04M | 9.48M | -1.75M | -6.27M |
| Investing Cash Flow | -35.62M | 20.21M | -165.26M | -1.95M | -832.17K | -467.45K |
| Financing Cash Flow | -2.15M | -477.00K | 231.89M | 39.11M | 3.06M | -122.03K |
DroneShield Limited Technical Analysis
Negative
1.95
Price Trends
2.14
Negative
2.72
Negative
3.00
Negative
Market Momentum
-0.11
Positive
38.36
Neutral
19.54
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:DRO, the sentiment is Negative. The current price of 1.95 is below the 20-day moving average (MA) of 1.97, below the 50-day MA of 2.14, and below the 200-day MA of 3.00, indicating a bearish trend. The MACD of -0.11 indicates Positive momentum. The RSI at 38.36 is Neutral, neither overbought nor oversold. The STOCH value of 19.54 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AU:DRO.
DroneShield Limited Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
62 Neutral | AU$2.23B | -31.41 | 7.19% | ― | 224.58% | -281.32% | |
58 Neutral | AU$1.62B | -52.24 | -9.56% | ― | 153.40% | -513.58% | |
49 Neutral | AU$27.17M | -4.31 | -76.06% | ― | 31.91% | ― | |
41 Neutral | AU$3.74M | -4.50 | -71.80% | ― | -3.46% | 69.77% | |
39 Underperform | AU$5.92M | 280.00 | 2.60% | ― | 76.04% | ― |
* Industrials Sector Average
AU:DRO
DroneShield Limited
1.75
-1.49
-45.99%
AU:EOS
Electro Optic Systems Holdings Limited
10.05
4.24
72.98%
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XTEK Limited
0.12
-0.19
-60.66%
AU:T3D
333D Limited
0.03
-0.02
-44.00%
AU:RKT
Delta Drone International Ltd
0.02
<0.01
83.33%
AU:SP3
Spectur Ltd.
0.01
-0.01
-47.62%
DroneShield Limited Corporate Events
DroneShield Seeks ASX Quotation for Additional Ordinary Shares
Aug 27, 2026
DroneShield Limited has applied for quotation of 1,128,946 ordinary fully paid shares on the ASX, to be traded under the ticker DRO. The securities are being listed following the exercise or conversion of existing options or other convertible inst...
DroneShield issues 1H 2026 interim results presentation with extensive investment disclaimers
Aug 26, 2026
DroneShield Limited has released its 1H 2026 interim results presentation, outlining current information on the company and its associated entities as of 26 August 2026. The document emphasises that the material is for information purposes only an...
DroneShield posts record revenue but swings to loss as it scales for next-gen counter-drone growth
Aug 26, 2026
DroneShield reported record first-half 2026 revenue of $125.8 million, up 74% year-on-year, and a sharp rise in recurring revenue to $11.5 million as its installed base reached 4,100 software-enabled devices. Despite this top-line growth, the comp...
DroneShield Delivers Strong Revenue Growth but Falls to Half-Year Loss
Aug 26, 2026
DroneShield Limited reported a sharp 74% rise in half-year revenues to $125.8 million for the period ended 30 June 2026 but swung from a prior-year profit to a net loss of $32.2 million.Net tangible assets per share declined from $0.33 to $0.28 an...
DroneShield launches flagship RfRecon RF intelligence system to bolster counter-drone capabilities
Aug 9, 2026
DroneShield has launched RfRecon, a portable radio frequency intelligence solution positioned as its flagship next-generation counter-drone product. Built on the company’s proprietary RfAI-3 architecture, the system combines ultra-wideband s...
DroneShield Updates Capital Structure as 288,672 Options Lapse
Jul 10, 2026
DroneShield Limited has notified the Australian Securities Exchange of the cessation of a class of options attached to its ordinary shares. The lapsed securities, issued under the DROAH code, were conditional options with various expiry dates and ...
DroneShield appoints new director Lee Goddard with no current shareholding
Jul 1, 2026
DroneShield Limited has appointed Lee Goddard as a director, effective 1 July 2026, signalling a further strengthening of its board as the defence technology company continues to scale. The initial director’s interest notice lodged with the ...
DroneShield grants additional performance options to director Angus Bean
Jun 29, 2026
DroneShield Limited has disclosed a change in the interests of director Angus Bean, following shareholder approval at the company’s 29 May 2026 annual general meeting. Bean has been issued 290,375 additional unlisted, unvested performance op...
DroneShield Issues New Tranche of Unquoted Options
Jun 29, 2026
DroneShield Limited has notified the market of the issue of 290,375 unquoted options, classified as DROAH, with various exercise prices and expiry dates. The options were issued on 26 June 2026, signalling additional equity-based incentives or fun...
DroneShield seeks ASX quotation for additional 15,000 shares
Jun 26, 2026
DroneShield Limited has applied to the ASX for quotation of 15,000 new fully paid ordinary shares under code DRO, issued on June 26, 2026. The small share issuance, arising from the exercise or conversion of existing securities, marginally increas...
DroneShield Adds Retired Rear Admiral Lee Goddard to Board Amid Global Growth Drive
Jun 21, 2026
DroneShield has appointed retired Rear Admiral Lee Goddard CSC as an independent non-executive director, effective 1 July 2026, adding more than three decades of high-level defence, national security and government experience to its board. The com...
DroneShield Seeks ASX Quotation for Additional Ordinary Shares
Jun 16, 2026
DroneShield Limited has applied for quotation on the ASX of 823,111 new fully paid ordinary shares, designated under the ticker DRO, with an issue date of 16 June 2026. The additional securities, arising from the exercise or conversion of existing...
Citigroup Entities Exit Substantial Holder Position in DroneShield
Jun 4, 2026
Citigroup Global Markets Australia and related Citigroup entities have notified DroneShield Limited that they have ceased to be substantial shareholders in the company as of 2 June 2026. The change follows a series of adjustments in relevant inter...
DroneShield wins $24.9m U.S. counter-drone contract with JIATF-401
Jun 2, 2026
DroneShield Limited has secured a $24.9 million contract to supply mobile and fixed-site counter-drone solutions to the U.S. Department of War’s Joint Interagency Task Force 401, with an initial $19.3 million value and a further $5.6 million...
DroneShield Discloses Director Peter James’ Exit and Final Equity Interests
May 29, 2026
DroneShield Limited has announced the cessation of Peter James as a director effective 29 May 2026, as disclosed in a Final Director’s Interest Notice to the ASX. The filing records that upon his departure, James holds 250,000 unlisted and v...
DroneShield AGM Delivers First Strike on Pay as Key Resolutions Pass
May 29, 2026
DroneShield Limited shareholders approved three key resolutions at the company’s annual general meeting, including the election of director Hamish McLennan, an increase in the maximum aggregate fees for non-executive directors and the issuan...
DroneShield issues AGM investor presentation with extensive disclaimers
May 29, 2026
DroneShield has released an investor presentation in conjunction with its Annual General Meeting, outlining summary information about the company, its activities, and its financial reporting framework as of 29 May 2026. The document emphasises tha...
DroneShield Rides Drone-Warfare Demand to Record Results and Global Expansion
May 29, 2026
DroneShield reported a transformational 2025 financial year, with revenue surging 276% to $216.5 million, SaaS revenue up 312%, and a swing to positive EBITDA and statutory profit, supported by $210 million in cash and inclusion in the SP/ASX 200....
Citigroup Exits Substantial Shareholding in DroneShield After Securities Lending Adjustments
May 28, 2026
Citigroup Global Markets Australia and related Citi entities have disclosed that they have ceased to be substantial shareholders in DroneShield Limited as of 26 May 2026, following a series of changes in their relevant interests in the companyR...
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.