Why DroneShield shares are making headlines again on Thursday

The counter-drone company had another update for investors today.

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DroneShield Ltd (ASX: DRO) shares were back in the spotlight on Thursday, nudging a fresh all-time high of $1.425 per share this morning following a company announcement.

Shares in the counter-drone technology company drifted lower through the day, however, before closing Thursday's session 4.07% in the red at $1.295.

What's driving DroneShield shares?

Today's price action follows the company's announcement it was set to raise cash via a share placement of 37.9 million shares to investors at 80 cents apiece. That implies a total capital raise of $30.32 million before costs.

Notably, 80 cents was the price the company's shares traded at around May this year before its atmospheric rise to a series of all-time highs this week. It has nudged to these highs in the last two sessions.

The placement — approved at the company's annual general meeting on 3 June — has been tremendously successful for investors so far.

Based on today's closing price, they look to have booked profits of around $18.5 million on the approximately 38 million shares.

Why investors are bullish on DroneShield

DroneShield has been on a remarkable upward trajectory, with its shares soaring 440% over the past year.

The meteoric rise can largely be attributed to increasing demand for the company's drone detection and disablement hardware.

DroneShield CEO Oleg Vornik said the counter-drone market was currently underserved. This was coupled with increasing public and private sector demand.

Vornik recently highlighted a scenario showing the company's potential to grow revenues in the coming five years from $55 million last year to $300 million–$500 million per annum.

DroneShield's latest quarterly results are a testament to this growth. The company reported $16.4 million in revenue for Q1 CY 2024, a 900% year-over-year increase.

Such impressive growth metrics have prompted analysts to upgrade the stock. For instance, Bell Potter analysts recently gave DroneShield a buy rating. The broker forecasts $97 million in sales and $24.4 million in earnings this year.

Share price summary

DroneShield shares have been on a tear this year and continue to gather support. With news the company is raising cash to fund its growth, the next task is on management, in my opinion.

The stock is up 250% this year to date, having climbed more than 55% in the past month of trade. The S&P/ASX 200 Index (ASX: XJO) has climbed 2.5% in this time.

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended DroneShield. 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 Scott Phillips.

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