DroneShield’s European Manufacturing Bet and A$730 Million Question Hang Over a Beaten-Down Stock

Counter-drone specialist DroneShield holds a $2.2B pipeline and new EU production, but share price nears support as ASIC probe and institutional exits weigh.

The disconnect between DroneShield’s operational momentum and its share price has rarely been wider. The counter-drone specialist sits on a record pipeline of A$2.2 billion spanning 312 projects, has launched its first European-made system, and ended the first quarter debt-free with strong cash reserves. Yet the stock changes hands at €1.74 — more than 52% below the October peak of €3.65 and just a whisker above the chart support level of €1.70.

Investor attention is fixed on two catalysts that could determine whether the shares break higher or sink further. The bigger of the two is a single transformative deal valued at A$730 million that is expected to be decided in the second half of this year. The other is the regulatory probe by the Australian Securities and Investments Commission into events of last November, when the former CEO Oleg Vornik and two other managers sold large blocks of shares shortly before the company issued — and then withdrew — a multi-million-dollar contract announcement.

European production goes live

At the Eurosatory defence exhibition in Paris, DroneShield unveiled its first counter-UAS system assembled in Europe. The hardware is functionally identical to the Australian-built units, but the supply chain has been redesigned: the vast majority of components now come from within the European Union. The shift is no mere logistics tweak — it opens the door to a pool of EU procurement money.

The European Defence Industrial Programme, armed with €1.5 billion, requires at least 65% of components in any funded system to originate from the EU, Norway or Ukraine. DroneShield now meets that threshold. The company’s European headquarters in Amsterdam was the first step; local production is the second. Chief Commercial Officer Louis Gamarra described the milestone as a strategic breakthrough, and the timing is deliberate. NATO member states are racing to expand their drone-defence capabilities, and a NATO procurement framework for small-drone countermeasures has been running since 2024. Separately, the UK’s National Police Chiefs’ Council has launched an £8 million framework agreement for national drone-defence capacity.

Revenue surge and institutional retreat

Operationally, the numbers are strong. First-quarter revenue jumped 121% to about A$74 million. The US Department of Defense placed an order for systems worth nearly A$25 million, and the US Border Patrol ordered equipment for deployments in Texas. A government grant programme is underpinning American demand. The company’s annual revenue from air and defence stands at around A$217 million, against a market capitalisation of roughly A$2.7 billion.

Nevertheless, institutional heavyweights have been heading for the exit. JPMorgan, Citigroup and BlackRock have each cut their stakes below the 5% reporting threshold since May, and another large shareholder followed in June. The ASIC investigation is widely seen as the culprit. The regulator is examining the sequence of share sales in November and the subsequent withdrawal of the contract announcement, which the company later described as a routine administrative change.

Leadership shake-up and shareholder pushback

Management has also been overhauled. In April, Angus Bean took over as chief executive. At the annual general meeting, more than half of shareholders voted against the remuneration report — a clear show of discontent. The company also issued around 823,000 new shares this week, stemming from the conversion of employee options that had vested in January and May. While such dilutive issuances are standard under performance-based compensation plans, they can add short-term selling pressure.

DroneShield will report half-year results on August 26. By then, the new European production lines will have had time to contribute to the top line, and the US factory is already running four months ahead of schedule. The ASIC cloud may persist, but the A$730 million decision due in the second half — and the broader pipeline of 312 projects — means the stock’s fate could hinge on a single signature. With the relative strength index at 39.6, near oversold territory, a bullish trigger would not lack technical conditions to support a reversal.