DroneShield Shares Surge on Record Contract Momentum

The Australian counter-drone technology specialist, DroneShield, is entering the new year with extraordinary commercial momentum. Following a phenomenal share price rally of approximately 300% in 2025, the company's order book is brimming with new business. With a market valuation now standing at three billion Australian dollars (AUD), investors are questioning whether this growth is already reflected in the share price or if further gains are imminent.

The company's fundamental metrics support a bullish outlook. DroneShield begins 2026 with secured revenue of nearly $98 million, a record-high figure for this point in its financial year. Notably, this substantial sum does not yet include the revenue impact from its most recent $8.2 million order, which will be recognized in either late 2025 or 2026 depending on the delivery schedule.

The final months of 2025 saw a remarkable acceleration in contract wins. Between November and December alone, DroneShield announced new agreements with a combined value of around $86 million. This surge culminated just before the year's end with an $8.2 million order for handheld counter-drone systems from a Western military client.

This latest deal highlights the firm's operational readiness. As the hardware is already in inventory, DroneShield anticipates delivery and payment within the first quarter of 2026. This marks the 39th order from this specific reseller, underscoring the strength and reliability of this ongoing partnership.

Should investors sell immediately? Or is it worth buying DroneShield?

The company's contract pipeline was recently filled at a breathtaking pace, including:
* A $49.6 million award from a European client in mid-December.
* $6.2 million in new business from the Asia-Pacific region.
* An additional $5.2 million order from another European military customer in November.

Strong Fundamentals Underpin Analyst Confidence

Market experts remain optimistic about the company's prospects. Bell Potter analyst Baxter Kirk has reaffirmed his buy recommendation, setting a price target of $4.40. He points out that firm contracts already cover roughly 26% of the total revenue forecast for the full 2026 financial year. This visibility is being driven by rising global defense budgets and an intensified focus on counter-unmanned aerial system (C-UAS) technology.

DroneShield's balance sheet provides a solid foundation for growth. With a cash position of $212.8 million and zero debt, the company possesses ample liquidity to fulfill its expanding order book without needing to raise additional capital. The business model's scalability is evident in a staggering year-over-year revenue increase of over 1,000% reported for the third quarter of 2025.

Shares concluded 2025 trading at $3.29. While this price sits well above the annual low, it still represents a significant discount to the 52-week high of over $6.70, suggesting considerable potential for appreciation. Upcoming quarterly reports will be crucial in demonstrating whether the company can efficiently convert its record backlog into profitable revenue.