DroneShield Limited

ASX:DRO

DroneShield Limited

ASX:DRO
TradeAdd trade order Follow Unfollow Set Price Alert
$1.905 (+0.5%)
Last close price
#11
Rank
28
Held by
71
Followers
TradeAdd trade order Follow Unfollow Set Price Alert
Reports (9) My Report Forum Investors
Forum Topics DRO DRO Valuation

Pinned straw:
Chagsy
Added 3 months ago

I don't own ASX:DRO, unfortunately.

As a thought experiment I wondered just how much it would have to grow to get justify its current SP.

DroneShield Limited’s operating margin for the half-year ended 30 June 2025 is approximately 7.2%, say in 3 years time it improves to well above industry averages of 10-13%, say 15%. Perhaps the SaaS segment does increase significantly to account for this

If we assume the share price goes nowhere and apply a PE of 40 (high growth company) then revenue would need to be a whisker under $500m to give NPAT of ~$72m. Their presentation states an aspirational pipeline of $5 billion for 2028. I'm assuming that is for revenue.

So, if you believe that there will be no disruption from other technologies and they will hit that aspiration, it's a bargain! Unless my maths is wrong, which it might be!

For those that do hold, I would love to hear your thoughts.
Clio
Added 3 months ago

@Chagsy - I've owned DRO for 2+ years - sold some not long ago, but it's still my biggest individual stock holding. And you're correct in one way - if all goes perfectly, yes, at $3.01 (where it currently sits) it's a bargain. But if things do not pan out exactly as predicted (and when do they ever?) then it's more likely it's overvalued at this point.

My opinion: with a SP so susceptible to investor-mania, it's likely to be a wild ride regardless! I bought for the underlying company, and that's why I continue to hold. Given where I started (0.21) I think it's still got a good way to run.

14
JohnnyM
Added 3 months ago

G'day @Chagsy,

Firstly, let me second @Clio’s sentiment that it’s going to be a wild ride. Today alone the price range has been $2.95 to $3.90, which means on an intraday basis, Mr Market knows the value of this business, plus or minus $1 Billion.

Personally, I find a DCF valuation useless in this scenario, putting some due diligence around growth assumptions is next to impossible without a working crystal ball. You tell me what number you want and as a magical accountant I can come up with spreadsheet that will tell you want you want to read.

I’m holding on because I believe the battlefield has changed forever. Between Trump’s one big beautiful bill and the rearming of Europe there is a huge spend coming the way of Drone makers and defenders. Putting aside the headline conflicts like Ukraine or Palestine even the little skirmishes like the one Thailand and Cambodia had a month ago showed one side with drones (Thailand) cleaning out Cambodian positions.

Randomly, at about that time, I saw one of DRO’s trade show photo’s showing some Two Generals (with Thai flags on their uniforms) talking to the team from DRO!

I also think the non-military requirements for DRO will be huge.

So from here I’m looking for product leadership, think tethered Drone defences, which they hopefully develop inhouse or acquire the tech if needed.

Finally I’d be completely fine with DRO dropping 50% from here, just to give you shot to get in, because my time horizon is to hold until it shows signs of not being at the forefront of product leadership or management does something stupid. 

21