Yesterday, Droneshield Ltd (ASX: DRO) shares closed 5.54% higher at $3.81 a piece.
Tuesday's uptick means the shares are now 14% higher over the year-to-date and 218% higher than this time last year.
As an Australian defence technology company specialising in counter-drone systems and electronic warfare solutions, Droneshield is one of very few ASX shares which have actually benefitted from rising geopolitical volatility and an ongoing war between the US and Iran.
In a conflict situation, drones are used for everything from surveillance to direct strikes. This creates a huge demand for counter-drone systems like the ones Droneshield specialises in. This is why governments are hiking their spend on defence, with a focus on anti-drone defence systems.
And the demand isn't expected to dwindle the minute the US and Iran reach a peace agreement either. While conflict boosts demand, Droneshield has also announced several new military contracts and orders recently, showing that this is likely a long-term shift in how nations defend themselves.
Image source: Getty Images
If I bought $5,000 worth of Droneshield shares 5 years ago, what are they worth now?
It's interesting to look back at how quickly Droneshield shares have climbed in value over the past six or 12 months. But, what about those investors which invested cash into the stock several years ago and have sat on it ever since?
Droneshield shares first listed on the ASX in June 2016 at 20 cents per share after raising $7 million through an IPO. The stock closed its first day of trading at 30 cents per share.
Fast forward to April 2021 and Droneshield shares had dropped to around 18 cents per share, shedding around 40% of its value. The shares didn't start gaining traction until early 2024.
While a 218% annual share price increase is impressive, those gains are eclipsed by Droneshield's 2,016.67% increase over the past five years!
That means that $5,000 invested into Droneshield shares 12 months ago is now worth $15,875. But $5,000 invested into Droneshield shares five years ago is now worth an enormous $105,833.50.
Can the shares keep climbing higher?
Yes, but not at the same rate they have climbed over the past five years.
TradingView data shows two out of three analysts have a strong buy rating on the defence stock. The third analyst has recently downgraded their rating to neutral.
The average target price for DroneShield shares over the next 12 months is $4.50 a piece. At the time of writing, that implies an 18% upside ahead for investors. Some are more bullish and expect the shares to jump 31% to $5 in the next 12 months.
