DroneShield Shares Soar as It Wins the Right to Protect US Skies

In a mixed day of trading for the ASX, DroneShield Ltd [ASX:DRO] is a clear standout.

The company is trading 34% higher at time of writing. Climbing ever higher thanks to a new deal with the US Air Force (USAF).

It is clearly a major win for the small firm.

But, is it enough to turn their fortunes around long term?

A good start, with a need for more momentum

The agreement will see DroneShield provide several DroneSentry products to a US airbase. Giving the company the opportunity to show off their technology to USAF.

Because, while they will net US$200,000 for the contract, the one-time revenue is less important than the opportunity.

DroneShield needs to do their best to turn this deal into a major partnership. One that could land them more contracts with the US Air Force or other military departments moving forward.

Luckily, it appears that the US is also open to this idea. With the contract containing an option for the USAF to acquire more systems if they wish to.

It certainly isn’t their first US deal, but they can’t afford it to be their last either. They need some form of stable sales pipeline.

A fact that DroneShield is keenly aware of, even if they don’t explicitly state it themselves:

The USAF has a substantial requirement for the protection of its bases, in the US and forward deployments, and we look forward to continuing to support the service members and the expanded rollout of our solutions for their protections.

Nevertheless, today’s win is a good start. What may be the first of many to come.

Investors will no doubt be hoping that is the case. Because the stock has certainly responded well to today’s news.

Raising expectations

Ultimately, this isn’t the first time DroneShield has claimed the limelight.

They’re a company that has won several impressive contracts over the years. All of which have tended to light a fire under the share price. But this fire tends to burn very bright, very quickly.

That is to say, they have yet to really prove they can maintain long-term success.

They’ve delivered some incredible highs in 2017 and 2019, but then have quickly fallen flat. With investors crashing back down to Earth alongside the share price as expectations have been raised and dashed, time and time again.

Hopefully, for DroneShield’s sake, this time is different.

They certainly have the potential for greatness, it is simply a matter of whether they can achieve it. Keep an eye on this company, because they could be pretty special.

In the meantime though, if you’re looking for stocks with more immediate flair then look no further. Our report on ‘high-value small-caps’ will show you some potentially promising places you can park your money in the market.

You can read the full report, right here; which includes four stock tips for free!


Ryan Clarkson-Ledward,
For Money Morning

Ryan Clarkson-Ledward is one of Money Morning’s analysts.

Ryan holds degrees in both communication and international business. He helps bring Money Morning readers the latest market updates, both locally and abroad. Ryan tackles all the issues investors need to know about that the mainstream media neglects.

Ryan’s primary focus is assisting Sam Volkering with background research and insight for readers by dissecting the latest events affecting the world. Working closely with Sam, they explore the latest in small-cap and technology stocks as well as cryptocurrency opportunities.

You can find Ryan’s contributing research, developments, and supporting information across several e-letters, including:

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