DroneShield’s Revenue Soars 276% and European Factory Goes Live, Yet Shares Are Oversold at 60% Below Peak

DroneShield's European expansion and 276% revenue surge contrast with a 61% stock decline, as an ASIC probe over a 2025 announcement clouds investor sentiment.

DroneShield has hit a major operational milestone: its first Counter-UAS system rolled off the assembly line in Europe on 15 June, and two weeks later the company launched a Polish supply chain initiative to line up local partners for manufacturing, electronics and testing. The European expansion, coupled with a new Amsterdam headquarters, positions the counter-drone specialist to serve a growing base of NATO and allied customers — particularly along the alliance’s eastern flank. But none of that momentum has been enough to lift the stock out of its deep funk.

The disconnect between business performance and market sentiment is stark. DroneShield’s shares changed hands at €1.43 on the day of the latest session, shedding 4.14% in a single day and 27.55% over the past 30 days. From the 52-week peak of €3.65 reached last October, the equity has lost almost 61% of its value. The technical picture confirms the weakness: the 50-day moving average sits at €1.87 and the 200-day at €2.04, with the Relative Strength Index reading 36.2 — a level that indicates oversold conditions.

The operational results, by contrast, paint a very different picture. In the just-completed fiscal year, revenue exploded 276% to A$216.55 million, while net profit came in at A$3.52 million, marking a clear turnaround for the company. The first quarter of the current year continued the trend, with sales reaching A$74 million. The high-margin software-as-a-service business was the standout: SaaS revenues surged 312% to A$11.6 million, and management aims to lift the share of recurring software revenue to between 30% and 40% within five years.

Bookings are equally robust. The order backlog already stands at A$171 million in guaranteed revenue for the current year, and the broader sales pipeline has swelled to A$2.3 billion. A series of six contracts worth US$21.7 million for portable counter-drone systems were secured in February 2026 alone.

Despite that pipeline, a cloud hangs over the share price. The Australian Securities and Investments Commission is investigating a corporate announcement made in November 2025 and related share trades. DroneShield itself is not accused of any wrongdoing, but the probe has injected a dose of uncertainty that is weighing on investor sentiment.

The wider market environment, however, continues to favour the company. Global military spending hit a record US$2.887 trillion in 2025, and the US Department of Defense has earmarked US$75 billion for drone technology. Industry forecasts see the global counter-drone market reaching US$20 billion by 2033. That backdrop has attracted big names: Motorola Solutions recently paid US$1.5 billion for D-Fend Solutions, while German rival Quantum Systems raised US$1.2 billion from investors including Airbus and Blackstone.

DroneShield’s own industry survey underscores the persistent gaps that fuel demand. Nearly 70% of infrastructure operators surveyed said their drone detection capabilities have major deficiencies. About 60% blamed regulatory hurdles, and half cited the technical complexity of integrating new systems. Tom Adams, the company’s security director, warned that pouring money into technology alone is insufficient without clear operational concepts.

Analysts remain bullish on the name despite the stock’s travails. Canaccord has a price target of A$3.75 on the shares, while Bell Potter sees room to A$4.80 — implying more than a doubling from current levels. Management has laid out a medium-term roadmap targeting annual revenue of US$1 billion by 2030, with software services contributing a third of that total. If the massive US defence budgets begin flowing into the market as expected from 2027, DroneShield, as an established player, stands to benefit directly.

For now, the stock is nursing a 2.37% gain on a year-to-date basis — a small positive that belies the sharp recent sell-off. The question over the coming months is whether the ramp?up in Europe, the record pipeline and the structural tailwinds can eventually outweigh the drag from the ASIC investigation.