The DroneShield Ltd (ASX: DRO) share price is flying higher today.
Shares in the All Ordinaries Index (ASX: XAO) drone defence company closed yesterday trading for $1.33. In morning trade on Tuesday, shares are changing hands for $1.44 apiece, up 8.3%.
For some context, the All Ords is down 0.2% at this same time.
This outperformance comes following the announcement of a new government contract win.
DroneShield share price lifts off on contract win
Investors are bidding up the DroneShield share price after the company reported it had received a repeat order from a US government customer for an unspecified number of its dismounted Counter-UxS systems.
DroneShield said it expects to deliver the full order, valued at $13.5 million, during the current quarter.
Commenting on the repeat order boosting the DroneShield share price today, Tom Branstetter, DroneShield's director of business development, said:
DroneShield's ability to rapidly deliver high-performance, lifesaving technology at this scale sets us apart in the counter-UAS industry, empowering our clients with cutting-edge solutions precisely when they need it.
Matt McCrann, DroneShield US CEO, said: "Our team appreciates the opportunity to support this urgent requirement and continue to build strong relationships with our federal partners."
McCrann continued:
Providing solutions that deliver a decisive advantage to our end users is what we strive for – the speed and scale at which we can now deliver, speaks volumes of our team members and their commitment to our customer and their mission.
Is the ASX drone defence stock a buy?
The DroneShield share price has soared 414% over the past 12 months. Yet, as you can see in the chart at the top of this article, shares remain down 45% since hitting all-time highs in July.
So, is the ASX drone defence stock a buy at current levels?
Well, as I noted on 25 September, when shares were trading for $1.23 each:
Hostile drone attacks in the Russian-Ukraine war and in the rising Middle East conflict are a daily occurrence. And global military spending is surging, opening the door to potentially further defence contracts for DroneShield.
I also cautioned that investors should expect further volatility from this very popular but still relatively small company, with potentially sizeable moves lower as well as higher.
My opinion on both these fronts hasn't changed since I penned that article on 25 September.
Nor have my thoughts on this statement.
"While I agree with the buy rating Bell Potter has on the stock, I believe the broker's $1.35 12-month price target is conservative."
Indeed, with the DroneShield share price hitting $1.44 this morning, $1.35 has already been left behind.
