What's going on with DroneShield shares today?
DroneShield Ltd (ASX: DRO) shares had a tough time on Wednesday.
The counterdrone technology company's shares were sold off again and dropped 6% to 70 cents.
The good news for shareholders is that the company's shares are bouncing back on Thursday morning.
In fact, the DroneShield share price was up 4% to 73 cents before being paused from trade.
This put it among the best performers on the All Ordinaries (ASX: XAO) index before the pause.
Why are DroneShield's shares racing higher today?
Today's gain was driven the release of an announcement before the market open.
According to the release, DroneShield has received a repeat order of $8.2 million from a major European military customer.
The company advised that the order is for dismounted and vehicle-mounted counter-UxS systems.
It expects to deliver the order over the next three months, including from available stock. The full cash payment is expected to be received during the first quarter of 2025.
The company's CEO, Oleg Vornik, believes that this order is a validation of the quality of DroneShield products and how they are meeting the needs of sophisticated military customers.
Commenting on the deal, Vornik said:
Larger orders of this type from repeat customers of this calibre are a validation that DroneShield products are meeting the challenge set by sophisticated military customers. As the threat of drones is increasing across the entire battlespace, militaries need broader packages like this one.
The chief executive also believes that this order demonstrates the company's competitive advantage in being able to link vehicle and fixed systems together. He adds:
DroneShield is unique globally in that we can provide an entire ecosystem of dismounted, vehicle and fixed systems and link them all together.
Should you invest?
A recent note out of Bell Potter reveals that its analysts see a lot of value in DroneShield's shares at current levels.
Prior to today's news, it had a buy rating and $1.20 price target on its shares. It said:
Whilst DroneShield's revenue YTD has been disappointing, we view this as an opportunity to reset market expectations, which were overly optimistic for CY24. However, DRO remains a high-quality technology company, operating in a rapidly growing market and is well capitalised to maintain its market leading position. We believe the current SP provides an attractive entry point considering DRO's strong runway into CY25 ($18m contracted rev.), robust market demand and appealing long-term growth outlook.
Why the pause?
The pause states the following:
Trading in the securities of the entity will be temporarily paused pending a further announcement.
Stay tuned for that.
The post What's going on with DroneShield shares today? appeared first on The Motley Fool Australia.
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended DroneShield. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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