Yahoo Finance DroneShield Limited (ASX:DRO): When Will It Breakeven?
DroneShield Limited (ASX:DRO) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. DroneShield Limited engages in the development, commercialization, and sale of hardware and software technology for drone detection and security worldwide. The company’s loss has recently broadened since it announced a AU$5.3m loss in the full financial year, compared to the latest trailing-twelve-month loss of AU$9.8m, moving it further away from breakeven. The most pressing concern for investors is DroneShield's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Check out our latest analysis for DroneShield
Expectations from some of the Australian Aerospace & Defense analysts is that DroneShield is on the verge of breakeven. They anticipate the company to incur a final loss in 2022, before generating positive profits of AU$200k in 2023. The company is therefore projected to breakeven just over a year from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 112%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
We're not going to go through company-specific developments for DroneShield given that this is a high-level summary, however, take into account that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 1.3% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
Next Steps:
There are too many aspects of DroneShield to cover in one brief article, but the key fundamentals for the company can all be found in one place – DroneShield's company page on Simply Wall St. We've also put together a list of key factors you should further research:
Historical Track Record: What has DroneShield's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on DroneShield's board and the CEO’s background.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
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.
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