Why the DroneShield (ASX:DRO) share price jumped 12% this morning

Investors appear to be excited about the company's latest deal…

| More on:
man jumping along increasing bar graph signifying jump in alumina share price

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The DroneShield Ltd (ASX: DRO) share price is taking off today after the company announced it has received a new $3.8 million defence contract.

In morning trade, DroneShield shares rocketed 12.12% higher to 18.5 cents apiece before partially retreating. At the time of writing, the company's shares are swapping hands for 17.25 cents each, up by 4.55% for the day so far.

New defence contract

Investors are buying up DroneShield shares after the company updated the market with a positive release.

According to the statement, DroneShield has received a 2-year defence contract with a Five Eyes country. The term 'Five Eyes' relates to a signals alliance between the United States, Canada, Australia, the United Kingdom, and New Zealand.

The deal, valued at about $3.8 million, represents ongoing commitments from government agencies, which have sought DroneShield products in the past.

DroneShield said the agreement contains the usual customary clauses of a research and development contract. It is expected around $2 million of the contract's value will be collected during the June and September 2021 quarters.

DroneShield CEO Oleg Vornik said, "This contract is testament to the world-leading capabilities of the DroneShield team".

What does DroneShield do?

DroneShield specialises in drone security technology. The company designs and develops detection systems that use specialised technology to protect people, organisations and critical infrastructure from drone incursions.

Specifically, its multi-layered products are centred around detection and disruption from unmanned aerial systems.

DroneShield share price summary

Over the past 12 months, DroneShield shares have been recovering from the fallout of COVID-19. After hitting a 52-week low of 10 cents in July last year, the company's share price has lifted by around 70%. However, DroneShield shares are still some way off their 52-week high of 25 cents achieved in September.

DroneShield has a market capitalisation of around $69 million. The company holds more than 389 million shares on its registry.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Industrials Shares

Man pointing at a blue rising share price graph.
Mergers & Acquisitions

Guess which ASX 300 stock is rocketing 10% on a $985 million cash bid!

Investors are piling into the ASX 300 stock on the back of a $985 million cash takeover bid.

Read more »

A man holds his head in his hands, despairing at the bad result he's reading on his computer.
Earnings Results

Brickworks share price tumbles on disappointing half-year loss

This loss didn't stop the company from increasing its dividend again.

Read more »

Man sitting in front of a laptop and analysing an earnings report.
Industrials Shares

Own Brickworks shares? Here's your half-year results preview

Is Brickworks going to post a sharp profit decline next week?

Read more »

People sit in rollercoaster seats with expressions of fear, terror and exhilaration as it goes into a steep downward descent representing the Novonix share price in FY22
Industrials Shares

DroneShield share price down 36% in 6 days. Should you buy the dip?

A top broker weighs in.

Read more »

A smiling businessman in the city looks at his phone and punches the air in celebration of good news.
Industrials Shares

Why is the Graincorp share price having such a bumper week?

Shareholders are smiling this week. And could the gains keep coming?

Read more »

Person with thumbs down and a red sad face poster covering the face.
Earnings Results

2 ASX industrials shares crashing up to 22% on earnings

Investors haven't responded positively to these results.

Read more »

a construction worker sits pensively at his desk with his arm propping up his chin as he looks at his laptop computer while wearing a hard hat and visibility vest in a bunker style construction shed.
Earnings Results

Guess which ASX 200 stock is nosediving 20% on half-year results

This company is claiming strong results for 1H FY24 but investors appear to disagree.

Read more »

a happy plumber smiles while repairing bathroom fittings in a home.
Earnings Results

Reece share price jumps 13% on stronger than expected half-year profits

Investors have been impressed with this half-year result.

Read more »