DroneShield Ltd (DRO) and Navigator Global Investments (NGI)

Hi Sidney,

DroneShield Ltd (DRO) – DRO has become arguably the most talked about stock in our Q&A in 2025. The interest in this counter-drone and counter-unscrewed systems technologies company has been exacerbated by Germanies huge planned defence spending, conflict in the Middle East and general migration towards drones in modern warfare. For the fiscal year ending December 31, 2024, DRO reported a net loss of $1.32 million, but on the more granular level things are clearly becoming exciting:

• DRO achieved record revenue of $57.5 million, a 6.4% increase from the prior year, and maintained a strong gross margin of approximately 72%.
• They also reported a substantial cash balance of $215.2 million as of February 18, 2025, providing a solid foundation for future growth initiatives.

DRO’s market cap of ~$2bn shows the stock is priced for growth, as we believe it should be, and we like the risk/reward ~$2.25 but this is a volatile growth stock which often corrects ~15%. This week saw DRO jump the most for 2025 after landing 3 contracts in Europe for $61.2mn, its largest order in history with this one order exceeding its entire 2024 revenue.

• We like DRO into dips but its a “hot” stock in a “hot” sector so caution is warranted at current levels. Valuation is difficult and relies on a lot of assumptions.

Navigator Global Investments (NGI) – we covered NGI in detail earlier question today, liking it around $1.60. Conservatively, if we apply a 10x PE, NGI is worth ~$2.10.