If you consider any teir 1 Defence or government contractors, I...

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jimmy2009

362 Posts.

38

10/01/22

17:59

Post #: 58758406
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Originally posted by 07Slavesam: ↑

This announcement is just another copy and paste of previous ones showcasing DRO's technology and forecasting areas of 'potential' future growth.

It's very disappointing to only see $10m of revenue after so many years of both public listing and having products in the national and global market. Even in the Tech/ Defence space which is highly reliant on R&D, confidentiality and governance this isn't impressive. 2020 was no doubt always going to be an average year performance wise, using that as the baseline to say that there has been a 'surge' and resultant good performance in 2021 is just clever marketing from Oleg and the DRO Management Team again. A couple of R&D grants and short term contracts from the DoD is where I expected DRO to be at several years ago, not going into 2022.

I've been in DRO for 5 years and participated in several CR's averaging down my purchase price to about where the Market is at the moment. The share price in my opinion accurately reflects the markets consensus. DRO's cash burn is increasing and is well over $1m a month now [ex. direct inventory creation costs], it's receipts are increasing, but the revenue and profit margins are not outpacing their costs. The only way they will is to greatly increase their revenue, and sparse sub $1m orders aren't going to do that anytime soon. I'm quite sure the next 4C will reflect this too.

I suspect DRO is in quite a precarious position in reality at the moment. It's recent scale-up hasn't yet delivered results, yet the cash in coffers won't last long. As usual, and as it has been for several years, DRO is stuck in a holding pattern awaiting a materially large order, until this happens I don't foresee any positive movement in the SP, if anything I actually see a decline in the SP by mid-2022 back to ~15c (if not even lower) as another CR seems imminent to meet their rising costs which have not been met by rising revenue.

If you're in it for the long haul, believe in the tech (as I once did), can justify the YoY underperformance against the market, and don't mind the risk of a CR along the way then perhaps their is still long term growth/ value in holding DRO. For now I'm putting my money elsewhere and will watch from the side lines until the current headwinds pass, or evaporate following the announcement of the seemingly forever elusive $>10m order.

Best of luck all.

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If you consider any teir 1 Defence or government contractors, I can assure you they were not winning multi- million dollar contracts in a relatively new risk environment. 2022 will be the make or break year for DRO. If they deliver even half the the proposed co
ntracts (100m) the shares will sit around 50- 80 cents. If they fail to deliver, they will sit around 8cents with a capital raising.

Personally I am confident in DRO ability to execute these contracts hence why I am a investor.

DRO Price at posting: 18.0¢ Sentiment: Buy Disclosure: Held
6 Upvote

4 Great analysis

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