Why is DroneShield (ASX: DRO) down ~8%?
DroneShield’s (DRO) trading update this morning disappointed on three fronts:
- FY26 revenue guidance of A$250–270m was well below the Bloomberg consensus of A$328m.
- 1H26 gross margin is expected to compress to 60%, reflecting a less favourable sales mix.
- While FY26 committed revenue has reached A$206m, only A$26m is committed beyond FY26, raising concerns over the visibility of the medium-term sales pipeline.
This was clearly bad news for a company struggling to regain the market’s trust after several indiscretions through 2025/6, which has seen the stock plummet more than 70% from last year’s high. We feel this latest earnings update is going to reinforce investors’ “if in doubt, stay out” mood.
- MM still has no interest in DRO.
