DroneShield Ltd (ASX: DRO) shares have fallen further into the red in Wednesday lunchtime trade.
At the time of writing, the shares are down around 7% and trading at $2.26 each. It's the lowest level the shares have fallen to in 2026 so far.
Today's decline means DroneShield shares are now down 18% over the past month, down 32% year to date, and 11% from trading levels this time last year.
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What happened to DroneShield shares this year?
There has been a significant shift in sentiment around DroneShield shares over the past couple of months.
The company had a strong start to the year. Its shares were supported by higher global defence budgets and geopolitical volatility amid conflict in the Middle East. But by May, investors seemed to turn their backs on the stock.
A combination of recent governance and regulatory issues and the cooling of conflict in the Middle East has dragged DroneShield's shares down.
While heightened conflict can increase interest in defence technology, particularly counter-drone systems, signs of easing will do the opposite.
Meanwhile, governance concerns have also weighed on sentiment. DroneShield announced in May that the Australian Securities and Investments Commission (ASIC) had requested the company provide reasonable assistance in connection with an investigation relating to market announcements and share trading in November 2025.
Now there are concerns about ongoing volatility, and that the company's future growth may not be large enough to justify its share price.
So the question is, is there anything left ahead for DroneShield shares? Or can the stock fall even further?
Here's what the experts think.
Buy, sell, or hold?
I wouldn't jump at the chance to add more DroneShield shares to my portfolio right now, but I wouldn't cut and run either.
And it looks like analysts are sharply divided, too.
TradingView data shows that analysts are split in their outlook for the counter-drone technology stock over the next 12 months, but they all agree we'll see some element of upside ahead.
Out of four analysts, two have a strong buy rating, and two have a sell or strong sell rating.
The average $3.41 target price still implies a potential 49% upside at the time of writing. The maximum $4.80 target price implies that DroneShield shares could leap another 110%. Meanwhile, some are more bearish, tipping the shares to sit unchanged from the current trading price of $2.28 a piece.
Canaccord Genuity is one analyst with a bullish view on the shares. It renewed its buy rating on Droneshield shares earlier this month, with a 12-month price target of $3.75.
