DRO 13.3% $1.96 droneshield limited

It is interesting that you speak of potential all time highs and...

  1. 694 Posts.
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    It is interesting that you speak of potential all time highs and worth looking at when it last reached an all time high. That occurred in 2019 when its revenue tripled to $3.6 M.

    It is also worth noting that 4 years later DRO needs a 50% price rise to break an all time high, despite its sales this year likely to be about 15 times higher than in 2019. On the surface that seems to make no sense at all. However, DRO was an unprofitable company and still is (hopefully that will change this year). That means that it must grow, otherwise it will never make money and the value of the company will tend to $0.

    Happily DRO is growing well. But the reality is that it still needs to grow further for it to survive (have a long term value of >$0). Its market cap is currently at $150 M, so sales must grow faster than the share price to catch up. This is normal in companies before they turn a profit.

    Probably any new sales from now will be realised in 2024 so the clock on 2024 revenue is either already ticking or about to start ticking. The first question is what does DRO need to do to maintain its share price going into 2024? My feeling is that if DRO maintains its sales at the $50-60 M mark for next year that might allow it to maintain its current share price (that is only because revenue rose so much in 2023 so a lower level of growth is likely to be acceptable to the market). To be sure of maintaining the share price $70M should do the trick.

    As for driving the price to a sustainable all time high (as opposed to the spikes we have seen in the past), I suspect the sales will need to be in the $80-90 M range. That would suggest that DRO is a profitable and sustainable business and warrant a significant re-rating.

    As to what the revenue will really be, I have absolutely no idea. No one on this forum or the company itself has provided any meaningful information. Everyone is completely in the dark, with perhaps the exception of the sales team. That doesn't mean next year won't be a great result. Just that no one knows what it will be.

    I have taken a cautious approach because of that. That is quite different to many posters on this forum who are equating sales directly to the share price and on that basis are predicting large rises. The reality is much more complex. The company must grow sales to hold its share price. Growth is already built in.


 
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