Yahoo Finance DroneShield Limited (ASX:DRO) On The Verge Of Breaking Even
With the business potentially at an important milestone, we thought we'd take a closer look at DroneShield Limited's (ASX:DRO) future prospects. DroneShield Limited engages in the development, commercialization, and sale of hardware and software technology for drone detection and security in Australia, and the United States. The AU$173m market-cap company announced a latest loss of AU$949k on 31 December 2022 for its most recent financial year result. 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.
See our latest analysis for DroneShield
DroneShield is bordering on breakeven, according to some Australian Aerospace & Defense analysts. They expect the company to post a final loss in 2022, before turning a profit of AU$1.8m in 2023. Therefore, the company is expected to breakeven roughly a year from now or less! At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 82%, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of DroneShield's upcoming projects, though, take into account that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 0.5% 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 key fundamentals of DroneShield which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at DroneShield, take a look at DroneShield's company page on Simply Wall St. We've also put together a list of essential factors you should look at:
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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