DroneShield Ltd (ASX: DRO) is one of the more closely watched growth shares on the ASX.
That is easy to see why. The company sits in a market that has moved from niche defence technology to a major global security issue.
Drones are now cheap, flexible, and increasingly capable. That creates a serious challenge for militaries, airports, prisons, public events, critical infrastructure, and government sites.
I think DroneShield shares remain a buy in June for three key reasons.
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The market is getting bigger
The first reason is the size of the opportunity. Counter-drone technology is no longer a theoretical theme. Governments and security agencies are now dealing with real drone risks across battlefields, borders, cities, and infrastructure.
That creates demand for systems that can detect, track, identify, and defeat hostile or unwanted drones.
I like DroneShield because it is positioned across several parts of that chain. The company is not simply selling one piece of equipment. Its offering includes sensors, electronic warfare systems, command-and-control software, and portable systems that can be used across different environments.
That breadth could be important as customers look for practical solutions rather than one-off products.
The market will not always grow in a straight line, and defence procurement can be slow. But I think the direction of travel is clear. Drones are becoming more central to modern conflict and security planning, which should keep demand for counter-drone capability rising.
Contract momentum is building
The second reason is that DroneShield is converting the theme into real customer activity.
This is important because a good theme is not enough on its own. Investors need to see that customers are willing to spend money, sign contracts, and deploy the company's technology.
Recent contract wins suggest DroneShield is gaining traction in important markets. These wins also help build credibility. Defence and government customers can be demanding, so each deployment can make the business more visible to other potential buyers.
I also like the potential for follow-on work. Counter-drone systems can require software, training, subscriptions, warranties, maintenance, upgrades, and additional units over time. If DroneShield can become trusted by customers, the relationship may extend well beyond the first order.
There are still risks to think about. Contract timing can be uneven, large orders can be hard to predict, and the company needs to keep scaling production and support. But I think the recent momentum gives investors more evidence that DroneShield's technology is being taken seriously.
The valuation looks more interesting
The third reason is value. DroneShield has been a volatile share, and investors have seen just how quickly expectations can move. Trading around $2.77, its shares are now down almost 60% from their high.
I think that makes the risk/reward more interesting.
The business is still exposed to a powerful long-term theme, but the share price is no longer sitting near its peak. For investors who missed the earlier run, the pullback may offer a better entry point.
That does not automatically make the stock cheap. DroneShield is still a growth company, and its valuation depends heavily on future contract wins, margin performance, production scaling, and customer adoption. If orders disappoint, the share price could remain under pressure.
But I think the lower share price gives investors more room for things to go right.
If DroneShield continues winning work, growing revenue, and proving that counter-drone demand can translate into a much larger business, today's price could look attractive with the benefit of hindsight.
Foolish takeaway
DroneShield shares are not for investors looking for a quiet blue-chip stock.
This is a growth company in a fast-moving defence technology market, and the share price could remain volatile.
But I think June is still a good time to consider buying. The drone threat is becoming more serious, customers are spending real money on counter-drone capability, and the recent pullback has made the valuation more appealing than it was near the highs.
For patient investors who can handle the risk, I think this remains one of the more compelling growth stories on the ASX.
