The DroneShield Ltd (ASX: DRO) share price has jumped 5% after the award of a $500 million contract.
This company says it’s a global leader in AI-powered counter-drone and uncrewed, autonomous systems defence. It has customers across military, government, law enforcement, critical infrastructure and commercial customers.
$500 million contracts
DroneShield announced that its US subsidiary has been awarded a joint interagency task force 401 (JIATF-401) domestic shield indefinite delivery, indefinite quantity (IDIQ) contract.
The IDIQ establishes a contracting vehicle through which DroneShield can compete for an receive future task and delivery orders supporting the rapid deployment of counter-unmanned aircraft systems (C-UAS) capabilities for homeland defence in the US.
Domestic shield is a JIATF-401 initiative focused on strengthening C-UAS protection for defence critical infrastructure and other high-priority locations across the US.
DroneShield noted that the IDIQ contract does not guarantee any orders and any amounts can’t be quantified at this time. DroneShield will continue to announce important orders to the ASX.
The ASX share said that the contract builds on DroneShield’s expanding relationship with JIATF-401 and broader United States C-UAS programs.
The company said that it recently delivered DroneSentry-X Mk2, on-the-move C-UAS capabilities for JIATF-401 requirements, including successful installation and acceptance of deployed technology.
The company also said its capabilities are also represented on the JIATF-401 counter-UAS marketplace, established to accelerate access to vetted counter-UAS technologies.
Management comments
The DroneShield chief executive officer and managing director Angus Bean said:
Securing a contract with this significant procurement vehicle in the United States reflects the strength of DroneShield’s technology and our role as part of a multi-layered counter-drone solution. JIATF-401 and IDIQ provide a streamlined pathway for US agencies to access our proven counter-drone capabilities as demand for rapid, scalable protection continues to increase.
Final thoughts on the DroneShield share price
The DroneShield share price has dropped 55% in the last six months, so it’s a lot cheaper. It could be undervalued if it keeps winning contracts, but it’s hard to say what will happen next.
It’s a lot cheaper, so it could be at an attractive price now, but it’s difficult to know how much future demand there will be and how profitable it will be.
For me, there are other ASX growth shares I’d rather buy where the growth path is clearer.
