Need To Know: Analysts Are Much More Bullish On DroneShield Limited (ASX:DRO)

Shareholders in DroneShield Limited (ASX:DRO) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. Investors have been pretty optimistic on DroneShield too, with the stock up 16% to AU$2.14 over the past week. We'll be curious to see if these new estimates convince the market to lift the stock price higher still.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

After the upgrade, the twin analysts covering DroneShield are now predicting revenues of AU$201m in 2025. If met, this would reflect a major 246% improvement in sales compared to the last 12 months. The losses are expected to disappear over the next year or so, with forecasts for a profit of AU$0.04 per share this year. Previously, the analysts had been modelling revenues of AU$133m and earnings per share (EPS) of AU$0.022 in 2025. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

View our latest analysis for DroneShield

It will come as no surprise to learn that the analysts have increased their price target for DroneShield 70% to AU$2.30 on the back of these upgrades.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that DroneShield's rate of growth is expected to accelerate meaningfully, with the forecast 246% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 56% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 10% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that DroneShield is expected to grow much faster than its industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, DroneShield could be worth investigating further.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for DroneShield going out as far as 2027, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.