One key difference is XTE is a purely hardware business. DRO is...

One key difference is XTE is a purely hardware business. DRO is both hardware and software. The market will always apply a higher multiple to a company producing an annuity-like revenue stream. I don't think the cash balance difference will be as large as it was at 30 Jun 22. The recent Bell Potter had forecast cash balance for XTE at less than $10m as 30 Jun 23 (I think that's overly pessimistic but we'll get a better indication in about a month).

It's true XTE did a deal for which they were paid up front but I've not seen any evidence that's the norm (happy to be proved wrong on that). DRO's latest deal was done on front-loaded payment terms. Great for both companies but not sure there is much evidence yet that either company has the ability to routinely dictate payment terms.

The biggest difference for me is FY23 revenue - XTE will deliver at least $82m, whereas it would be mighty if DRO could deliver half of that. That does support your view that the difference in valuation isn't justified, but there are reasons why all else being equal DRO would be seen as more attractive.

I hold both so have hedged my bets.