DroneShield Ltd. (DRO:ASX; DRSHF:OTC) garnered a record $11 million ($11M) contract with an undisclosed governmental agency for various kinds of counterdrone equipment, reported Bell Potter analyst Daniel Laing in a Dec. 21 research note.
"The contract is a major step forward for DroneShield considering previous material contracts frequented between $0.5M and $2M, and we believe this truly solidifies the company as a leading player in the global counterdrone market," Laing wrote.
In other news, Bell Potter increased its target price on the Australian company by 6.7% to $0.32 per share from $0.30. In comparison, DroneShield's current share price is $0.21.
Bell Potter rates DroneShield Buy.
The bump up in the price target resulted from the investment and financial advisory firm updating forecasts in its model on the defense company. Bell Potter increased its revenue forecasts for DroneShield for 2023 by 10% and for 2024 by 8% but kept its estimate for 2022 at $16M.
"We now forecast the company to break even in 2023, with a modest profit after tax of less than $0.1M, and our calendar year-end 2022 cash balance increases to $10.5M to account for the recent placement," wrote Laing.
He noted DroneShield will likely be able to complete nearly half of the new order this year, generating some revenue from it in 2022 and the rest in 2023.
"Therefore, the company will begin 2023 with a solid revenue foundation in conjunction with a sales pipeline of almost $180M (as per the October 13 presentation)," wrote Laing.
Bell Potter rates DroneShield Buy.
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Disclosures For Bell Potter, DroneShield Ltd., December 21, 2022
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