@GazD at one level, you might be right. Certainly, it appeared to get frothy on the way up (easy to say after the froth has blown off!) and StrawPeople have recent valuations of $1.60 and $2.00. And indeed 2 covering analysts - while less enthusiastic - would also agree with a TP = $1.20.

It has piqued my interest, because while I nearly always miss the initial burst of hype with growth stocks, I often step in when the bubble bursts and the market over-reacts in the other direction, as you are hypothesising. And I have had a passing watch on $DRO for a couple of years, and went through a phase thinking "why didn't I act on what seemed like a good idea much earlier"? A few things have held me back.

First, firms reliant on defence orders, tend to have lumpy contracts. This can create issues with cash conversion, inventory, and production efficiency, as well as leading to intrinsically lower stability of earnings. (I had my first experience of this 4-5 years ago with $EOS, and I am keen not to repeat it.). Of course, for the savvy investor, this can be turned to advantage, if you can exploit the resulting SP volatility, through a deep understanding of the operating fundamentals.

However, something more fundamental has scared me off. I don't understand how $DRO can build a sustainable competitive advantage in a field which is getting the attention of the big defence industry players, as well as many tech-driven startups. Names here include: Lockheed Martin, THALES, SAAB AB, and Israel Aerospace Industries, and the plethora of smaller specialist firms - many of which are listed in $DRO investor presentations. Furthermore, there are several DARPA programs underway in this area. And no doubt many defence departments the world over are chasing this. (Has $DRO had any DARPA funding?) We've all seen how drones of all shapes and sizes are transforming the modern battlefield, and so it follows that the money going into innovation in this arena is vast.

$DRO appears to spend of the order of $10m on R&D, and talks about building to a team of 220 engineers by the end of 2025 - so maybe its ramping up to more like $20m. But I wonder if this is at all meaningful.

I'll put my hand up and say I don't focus on the defense sector. But this morning I was reading an article in the WSJ (which made me think about your post). It reported that traditional drone technology in Ukraine, means that only about 1-in-5 drones get to target, due to jamming technologies used by the Russians. However, the Ukrainians are now bringing on a US technology developed by a firm Auterion, which allows the drone to be self-guiding on its final approach, and essentially immune to jamming technologies. Based on tests, this is reported to raise the hit rate from 1-in-5 to 9-in-10, as jamming technologies are rendered ineffective.

As I said, I don't understand the full significance of this specific news item. But I wonder if it is an example of the kinds of technolgy leaps that are likely to occur in this hotly contested arena?

So, $DRO is not for me. Which is not the same as saying it won't recover and see another SP run up, based on good news flows on orders. It probably will. And, furthermore, in an industry such as this, surely it must be a perennial M&A target?

Disc: Not held, not going to