I have no idea what the 4C will look like. The company is pretty opaque when it comes to the future. But this is what my guess is
The Revenue is completely unpredictable. 2023 revenue is dominated by the $33 M dollar contract so what the receivable numbers look like will depend mostly on the timing of this contract. If DRO is paid in installments and has completed most of the work the numbers will be high, if not they will be low. It will be the number combined with the commentary that will important.
The number I will be most closely looking at is the costs. This will give a clearer picture of how the business is going to scale over time if revenue rises. Hopefully, it will give a pretty good idea of where the break even point lies. A number above $15M for costs for the quarter will raise alarm bells.
I would not expect a huge rise in the share price even if these numbers look good. Though it will be a big negative if costs rise too fast.
2023 is done and it looks live revenue will be in the 50-60k range. I am expecting/guessing a small profit for the year. Probably in the range of $0-$5M but there is a huge level of uncertainty around these numbers and I would not be willing to put my money where my mouth is on them.
As far as the market is concerned, it is 2024 that it will be mainly looking at. Although the year has not started, things are not looking great for Q1 next year. DRO has announced no new contracts so far. Given that we only 8 weeks away from the Christmas shutdown, the clock is ticking on Q1 revenue. DRO needs a big contract in the next month, otherwise Q1 2024 is going to be a big step backwards from Q3 & Q4 2023. One of the big issues for the market is DRO's earnings quality, which is really poor. They are too reliant on a few big contracts/customers rather than having a steady stream of repeat business. That's not going to change in the medium term and will be a shadow that hangs over the share price. If in doubt, the market will sell first and ask questions later.
DRO Price at posting:
27.5¢ Sentiment: Hold Disclosure: Held
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