Morningstar snapshot from 11/03/2026:
- Fair value: A$2.95
- Five-star price: A$1.36 — this is my entry point
- Current price: A$4.02
- Valuation: Overvalued
- Uncertainty: Very High
- Economic moat: Narrow
- 2025 revenue: A$216.5m
- Revenue growth in 2025: 276%
- Cash balance: A$209.4m
- Shares outstanding: ~913m
- Gross margin: ~60.9%
- Operating margin: ~-1.9%
My interest in DroneShield is based on the long-term need for counter-drone technology, but only at the right price.
The current conflict involving Iran is another reminder that drones are now a real threat to military assets, energy infrastructure and broader regional security. That does not mean DroneShield will directly benefit from this specific conflict, but it does strengthen the long-term case for specialised counter-UAS providers.
Even so, valuation still matters. Morningstar’s fair value is A$2.95, uncertainty is very high, and the stock is trading above that level. The business is growing fast, but profitability is still early and defence demand can be uneven.
For me, the right way to approach this stock is through a large margin of safety. That is why my entry point is the five-star price of A$1.36. At that level, I think the risk-reward becomes much more attractive.
I kept the Iran point thematic rather than claiming DroneShield is directly involved. Reuters has reported Iranian drone attacks and disruption risk around the Strait of Hormuz this month, and DroneShield separately announced recent Western military contracts.
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Disclaimer
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