DroneShield Ltd (ASX: DRO) shares have crashed into the red in early morning trade as investors digest the company's latest half-year FY26 update.
At the time of writing, the counter-drone operators' shares are down around 6% and trading at $1.83.
The latest price movement means DroneShield shares are now down 45% for the year-to-date, and are 49% lower than 12 months ago.
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What's the latest out of DroneShield?
The ASX defence company revealed that for the six months ending 30th of June, revenue jumped 74% to a record $125.8 million. Recurring revenue also increased 229% to $11.5 million.
But DroneShield also posted a statutory net loss after tax of $32.2 million, compared with a $2.1 million profit a year earlier. Underlying EBITDA also came in at a $12.4 million loss, compared with an $8 million profit posted in the first half of FY25.
The counter-drone operator said that the company has been focused on expanding its product range and geographical footprint over the first half of FY26. The higher corresponding operating costs, higher staff numbers, and strategic software and hardware investments all contributed to the reported loss.
Did the result meet market expectations?
DroneShield's $125.8 million revenue came in line with guidance expectations. But recurring revenue was a miss, at $11.5 million versus guidance of $14.2 million for the six-month period.
Gross margin was in line with expectations at 60%, versus 65% in the prior corresponding period.
Clearly, investors aren't thrilled with the result either, with many rushing to sell off their stake in the company.
Are DroneShield shares a buy, sell or hold?
The experts are divided in their outlook for DroneShield shares over the next 12 months. But after today's results announcement, we may see some brokers and analysts revise their stance in the coming days.
At the time of writing, Market Index data shows the majority of brokers have a sell rating on DroneShield shares. However, the $2.40 target price implies a potential 30% upside ahead, at the time of writing.
TradingView data shows that of the four analysts, two have a strong buy rating and two have a sell/strong sell rating.
The target prices also vary. The average target price of $2.13 implies a potential 18% upside over the next 12 months, at the time of writing.
But the minimum $1.60 target price implies a 11% downside at the time of writing. And the maximum $2.80 target price suggests DroneShield shares could rise another 55% over the next 12 months.
The latest forecasts are a sharp revision from just one month ago. In late July, some experts were forecasting DroneShield shares to rally as high as $4.80 each.
