DroneShield Stock Sinks Despite Record Backlog
DroneShield's stock has been on a downward trend, plummeting by nearly 50 percent year-to-date. Despite this decline, the company reported a record backlog of $206 million for 2026 as of July 28, which is roughly 95 percent of its entire 2025 turnover and more than double what was locked in at the start of the year.
However, this news was overshadowed by a sharply lower revenue forecast. The company confirmed its guidance of $250 to $270 million in revenue for fiscal 2026, implying growth of 15 to 25 percent over the $216.5 million generated in 2025. This fell short of analyst expectations, which had been closer to $323 to $328 million.
The first-half numbers released alongside the guidance showed a 74 percent increase year-on-year in revenue for the first six months of 2026, but this decelerated from the 121 percent growth recorded in the March quarter. Gross margin slipped to 60 percent from 65 percent due to an unfavorable sales mix and currency effects.
The company's backlog is a significant factor in keeping the bull case alive, as it could theoretically hit the lower end of its guidance without any additional contracts. However, the stock remains under pressure, with Jefferies cutting its twelve-month price target by 27 percent to $2.05 Australian dollars and maintaining a 'Sell' rating.