DroneShield Ltd (ASX: DRO) shares have been incredible performers over the past 12 months.
During this time, the counter-drone technology company's shares have risen over 380% and currently trade at $4.07.
To put that into context, a $5,000 investment a year ago would now be worth approximately $24,000.
But those returns are now behind us. Could DroneShield shares double again this year? Let's find out.
Image source: Getty Images
Could DroneShield shares double?
It is worth remembering that nobody can say with certainty whether a share price will go higher, let alone double in value. But that doesn't mean that we can't consider whether it is a possibility.
Firstly, at the current share price, DroneShield has a market capitalisation of $3.75 billion.
This means that if its shares were to double, it would take the company's market capitalisation to $7.5 billion.
That's more than retail giant Harvey Norman Holdings Ltd (ASX: HVN), Dan Murphy's owner Endeavour Group Ltd (ASX: EDV), and energy giant AGL Energy Limited (ASX: AGL).
That sort of valuation might be a bit of a stretch based on its current sales and profits, but there's no reason why it couldn't get there in the next few years if its strong momentum continues.
For now, I would say the probability of its shares doubling is low. But I would also never rule anything out with this market darling.
What are brokers saying?
The team at Bell Potter is bullish on DroneShield shares. However, not to the point that the broker believes they could double in value over the next 12 months.
According to a recent note, the broker has a buy rating and $4.80 price target on its shares.
Based on its current share price of $4.07, this implies potential upside of 18% for investors over the next 12 months.
While not a 100% gain, this is still comfortably ahead of the average annual share market return of around 10%. So, it certainly isn't something to be sniffed at!
Commenting on its buy recommendation, Bell Potter said:
We believe DRO has a market leading RF detect/defeat C-UAS offering and a strengthening competitive advantage owing to its years of battlefield experience and large and focused R&D team. We expect 2026 will be an inflection point for the global C-UAS industry with countries poised to unleash a wave of spending on RF detect and defeat solutions.
Consequently, we believe DRO should see material contracts flowing from its $2.3b potential sales pipeline over the next 3-6 months as defence budgets roll over to FY26e. At 35x CY26e EV / EBITDA, DRO trades at a discount to the global drone peer group. Further, we see upside risk to our revenue forecasts in CY26/27e, given the opportunities observed in the C-UAS industry.
