DroneShield share price rockets 9% on 'significant' new contract

The DroneShield Ltd (ASX: DRO) share price is lifting off today.

Shares in the S&P/ASX 300 Index (ASX: XKO) drone defence company closed Friday trading for 76 cents. In morning trade on Monday, shares are changing hands for 82.5 cents apiece, up 8.6%.

For some context, the ASX 300 is up 0.4% at this same time.

As you can see on the chart above, this puts the DroneShield share price up 123% over the past 12 months. However, the stock still has a ways to go before recouping its $2.60 per share highs posted on 15 July.

Here's what's grabbing investor interest today.

What's lifting the DroneShield share price?

Investors are bidding up the DroneShield share price after the company announced a "significant order" from a Latin American customer.

Management said the $9.7 million order from a major Latin American military end customer represented "an exciting step forward" in the company's global growth ambitions, noting that it highlighted the increasing demand for DroneShield products in a "dynamic and diverse market".

The contract was initiated through DroneShield's Latin American in-country reseller, said to be an established local entity and one of the leading integrators and resellers of advanced technological solutions in its country.

DroneShield said its in-country reseller has more than 19 years of sales history and has successfully executed more than 165 defence-related contracts, including to the government end customer placing this new $9.7 million order.

The order is for a combination of dismounted, mobile, and fixed-site counter-drone systems (C-UxS). It represents DroneShield's first order from this in-country reseller and end customer.

What did management say?

Commenting on the new contract award boosting the DroneShield share price today, CEO Oleg Vornik said:

DroneShield has spent much of 2024 scaling its presence in the Latin American market and has built a substantial pipeline diversified over multiple countries.

2025 will see further development in the LATAM market, with the recent appointment of a dedicated LATAM Sales Director, Carlos Gutierrez.

The company expects delivery and payment to occur in the first half of 2025. Around 80% of that payment is expected before shipping, with the remaining 20% to be paid following delivery.

What's been moving the DroneShield share price?

While up 123% since this time last year, the DroneShield share price has come under selling pressure over recent months amid fears the stock rose too high too quickly.

Although the company has continued to post some impressive growth figures.

At its third quarter results, covering the three months to 30 September, DroneShield reported an 18% year-on-year increase in cash receipts to $9.1 million, marking a record third-quarter performance for the company.

And the growth outlook remains solid, with management forecasting a sales pipeline valued at $1.1 billion.

On the balance sheet, DroneShield had a cash balance of $238.3 million and no debt as of 30 September.

The post DroneShield share price rockets 9% on 'significant' new contract appeared first on The Motley Fool Australia.

Motley Fool contributor Bernd Struben 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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