DroneShield Ltd (ASX: DRO) shares have had a rough year.
The stock is down almost 50% since the start of 2026, even though the underlying business is still growing strongly.
For patient investors comfortable with plenty of volatility, I think that disconnect is becoming attractive.
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Growth is still there
DroneShield's latest half-year result was a little softer than I had hoped in some areas, particularly given the expectations that had built around the company.
But I do not think the bigger picture has changed.
First-half revenue reached $125.8 million, up 74% on the prior corresponding period. Recurring revenue also grew strongly, although it remains a relatively small part of the overall business.
That tells me demand for DroneShield's counter-drone technology is still expanding quickly.
The company operates in a market that has become much more important in recent years. Drones are playing a growing role in modern warfare, while governments are also looking for better ways to protect military bases, airports, infrastructure, and other sensitive locations.
I think spending on counter-drone technology could remain elevated for a long time.
I am looking much further ahead
The main reason I would consider buying after the fall is that I think DroneShield could be a considerably larger company in 10 years.
It is still building out manufacturing capacity, expanding internationally, and investing in new hardware and software.
That is important because counter-drone technology will not stand still. Threats will keep changing, so customers will need systems that can be upgraded and improved rather than equipment that quickly becomes outdated.
DroneShield has spent years specialising in this field, and I think that focus gives it a chance to remain relevant as the market develops.
If it keeps winning larger contracts and builds deeper relationships with defence and security customers, today's business could eventually look quite small.
The share price will probably remain volatile
I would not treat the 50% decline as proof that DroneShield shares are automatically cheap.
DroneShield remains a high-risk growth investment and trades on a very high P/E ratio.
Defence contracts can arrive unevenly, procurement processes can take longer than expected, and competition is increasing as more companies target the counter-drone market.
The company is also investing heavily for future growth, which means results may not progress neatly from one period to the next.
That is why I would keep any position relatively small and only invest money I was prepared to leave in the shares through potentially sharp moves in either direction.
Foolish takeaway
Yes, I think DroneShield shares are worth considering after falling around 50% in 2026.
The latest performance was not perfect, but the company is still delivering strong growth in a market with substantial long-term potential.
For investors willing to ride out the volatility, I think the current weakness could prove to be an opportunity if DroneShield becomes the much larger defence technology business I believe it can be over the next decade.
