DroneShield (DRO) Discussion Thread, page-44

It is a deeptech startup, not a bluechip. Investment is about their technology, how difficult it is to replicate, and the total addressable market. A deeptech startup normally isn't profitable for years, but can have extremely high valuations based on the technology.

The reason I have invested in droneshield is because I understand their tech, I know how difficult it is to replicate, and I can see that their products are going to be needed in every airport, mall and government facility. They have also demonstrated they can sell to the US government, which is no easy feat. They love to drag their feet almost as much as the Australian government. Furthermore they've demonstrated they can scale manufacturing to some extent. It is often far harder to make the factory than the product. They've done an admirable job stockpiling inventory just in time for sales. That they're profitable as well is great, but its not what I'm most excited about. That said, a PE ration of 35 with year on year growth in the double or triple digit percentages is insane. This is, quite obviously, massively undervalued for a deeptech startup. Consider that NVidia, which is not a startup and has far less room to grow, has a PE ratio of 72. AMD has a PE ration of 1700.

For a comparable deeptech investment, look at Epirus. It has a valuation of several billion now, and is in a similar position to Droneshield with complimentary tech (they are both used in the same contract by SAIC). Epirus was valued $2.1B AUD premoney at the beginning of 2022, before the role of Drones in Ukraine was apparent. They're worth a lot more now. Droneshield is currently valued at perhaps 10% of what it would be valued at if it has been a venture backed private startup. Instead, it is listed on the ASX where it is being undervalued by technologically illiterate day traders (not saying this is you, but the market in general - Australia only really understands how to dig things out of the ground and grow things - our economy is massively underdeveloped in many areas).