DroneShield has become one of the hottest defence companies of the last 12 months, sending its market cap surging to $3.3bn, and after its recent 33% correction the stock has got the bit back between its teeth this week after announcing it has sold more than 4000 systems worldwide and receiving orders for $7.9mn from the US defence department. The market remains excited that the company is preparing to begin manufacturing in Europe in the first quarter of 2026, with plans to establish a separate research and development centre of excellence.
The rise of DRO has led it to becoming one of the most discussed stocks in our Q&A Weekend Report. The current unstable geopolitical world is tailor-made for DRO as defence budgets surge, with NATO countries collectively having spent $US1.5 trillion in 2024. Importantly, DRO is expensive and subsequently volatile, as we’ve seen throughout 2025. The company needs to keep winning contracts to trade higher, but as we’ve seen this month, it’s very capable of doing so. At the start of the month, we said we liked DRO around $3, which looks good today, and we’ve lifted this level to $3.50 as the company continues to deliver.
- We like DRO from a risk/reward perspective below $3.50, but note the stock is volatile.
MM is cautiously bullish towards DRO
Add To Hit List
