I think the next 2 years is going to be where the magic happens or when she runs out of mana.
IMO Droneshield is the best company we have for comparison with AML3D, being both a new tech and manufacturing company in the defence space (still very different). She is also hot in the defence space with her focus on anti-drone technology considering what has occurred in the Ukraine War.
Similarly, I view AML as hot in the defence space considering the potential application of her technology in submarine manufacturing (and other sectors). For me, the critical aspect she has going for her right now is the work on the virginia class submarines and any potential work on other classes of sub or unmanned underwater vehicles. In the recent war game simulations run by CSIS and RAND, the virginia class attack sub was concluded to be the most valuable asset in any conflict with China over Taiwan. I seem to have misplaced the article that included the kill/death ratio of the sub but here is the CSIS report https://www.csis.org/analysis/first-battle-next-war-wargaming-chinese-invasion-taiwan - If you download the report and go to pages 135-136, you will see what I mean. This is why the US and Australia among others are so hard pressed to produce submarines. Their logic is defeat a larger surface fleet with more sophisticated under water vessels.
If you take a look at a graph of Drone Shield's share price performance over the last 4 years I think AML is where DRO was in 2022. What we are chasing is the first 20mil~ contract she landed in early 2023 which led to her to a re-rate, a significant raise, subsequent contracts and ultimately to a 1.2billion valuation. Despite only being forcast to hit 100 mil revenue for 2024 and sitting at a P/E ratio of around 85 the market thinks she's worth 1.2 billion. I think the big take away here is that similar to anti-drone tech for DRO AML needs her first significant manufacturing contract in the submarine space with the US Navy. Don't get me wrong I am not holding out for AML to crack a 1 billion market. The point I am trying to get across regardless of what the books say we need a meaty contract in a hot space like submarine manufacturing.
AML is definitely doing work in the space but as it stands we have the 2.5 mil machine sale to cogitic (among others), several metal characterisation contracts, and the most significant contract being the 2mil contract to develop and manufacture submarine test parts for the US Navy over 9 months from August 2023. I am assuming that the contract finished up somewhere between May and June and testing would be ongoing at this point or nearing completion. If the testing contract for a few submarine parts is worth 2 mil then I am assuming a 10-20mil contract is definitely on the table here.
Hopefully we hear something in this space soon, maybe by the end of September following on from the comissioning of the US facility this quarter. Till then maybe we landed 7-8mil revenue FY24 and are on track to hit 15-20mil revenue for FY25 depending on future contracts? Within the next 3 months I am atleast expecting several metal characterisation and US Navy test contracts to immediately justify the new facility, which the market should hopefully like. IMO best case scenario, we land a more significant submarine manufacturing contract Q2 FY25 or at least by its end. If its going to happen I can't imagine it taking longer than that.
12 month target of 15-25 cents seems pretty reasonable in my books if the new facility is justified with some descent new contracts and best case with something more significant maybe 20-30?
Not financial advice I am a financial fool.
AL3 Price at posting:
9.6¢ Sentiment: Buy Disclosure: Held
(20min delay)