The DroneShield Ltd (ASX: DRO) share price rose 9% after announcing a new contract win worth $9.7 million.
DroneShield says it provides AI-based platforms for protection against advanced threats such as drones and autonomous systems. It provides counterdrone, electronic warfare solutions and ‘off-the-shelf’ products designed for a variety of ground, sea and air platforms. Customers include military, intelligence communities, government, law enforcement, critical infrastructure and airports.
South American contract win
DroneShield announced a significant customer order from Latin America, which marks “an exciting step forward in its global growth”, according to the company.
The business said this development highlights the increasing demand for its products in this dynamic and diverse market.
The ASX share explained this sale was through its Latin American in-country reseller, for delivery to a military end-customer in that country. The reseller is an “established local entity” and “one of the leading integrators and resellers of advanced technological solutions in its country, with over 19 years of sales and having successfully executed more than 165 defence-related contracts, including to the relevant government end customer.”
The order is for a combination of dismounted, mobile and fixed-site counterdrone systems. It’s the first order from this in-country reseller and this end customer – I’m not surprised the DroneShield share price has jumped in response.
Delivery and payment are expected to occur in the first half of FY25, with approximately 80% payment expected before shipping and 20% after delivery.
Management commentary
The DroneShield CEO Oleg Vornik said:
DroneShield has spent much of 2024 scaling its presence in the Latin American market and has built a substantial pipeline diversified over multiple countries. 2025 will see further development in the LATAM market, with the recent appointment of a dedicated LATAM Sales Director, Carlos Gutierrez.
Final thoughts on the DroneShield share price
With the company down around 70% since July 2024, it looks like a much more appealing valuation, particularly as it continues winning new contracts like the one announced today.
I’m not sure if it’s a buy right now because I’m not sure how much of the market it can capture and how large the addressable market really is.
For me, there are other ASX growth shares that appeal to me more, though this company is an interesting one to follow.
