DroneShield Ltd (ASX: DRO) shares have been in the spotlight this week.
On Wednesday, the counter-drone technology company released its eagerly anticipated first-quarter update.
Was it a strong result? And should you be buying its shares today?
Let's see what analysts at Bell Potter are saying about this popular ASX share.
Image source: Getty Images
What is the broker saying?
Bell Potter was pleased with the company's quarterly update, highlighting that its revenue was up more than expected and its committed revenues continue to creep higher. It said:
Revenue: DRO reported $74m in revenue up 121% YoY which was a higher print than the April 8th trading update of $63m due to the timing of deliveries. Quarterly SaaS revenues were $5.1m vs $11.6m for the full year 2025, 6.9% of revenue.
Order intake: Committed revenues (incl. YTD revenue) for CY26 as at 20 April 2026 was $155m a $15m increase since 31 March 2026 reflecting a steady flow of smaller orders. Notably, DRO said it has received an order related to the FIFA World Cup. We expect more orders to flow from key USA events over the coming months. DRO has committed revenues comprising 42% of our upgraded CY26 revenue estimate of $365m (prev. $324m). Using November 30 as the cutoff for orders delivered in CY26, we are 39% of the way through the year, suggesting current contract activity is tracking ahead of our upgraded forecast.
Should you buy DroneShield shares?
According to the note, the broker has retained its buy rating and $4.80 price target on DroneShield's shares.
Based on its current share price of $3.83, this would mean potential upside of 25% for investors over the next 12 months.
Bell Potter remains very positive on the company and believes it is well-placed to benefit from a wave of spending in the industry. Commenting on the company, the broker 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 43x 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.
