When the Australian government increased defence spending and revealed its intention to bolster the nation's defence capabilities, the ASX Defense Industry Stocks got a natural push.
Companies within defence sector started witnessing a surge in funding. Top Defense Stocks, benefiting from long-term contracts started generating stable revenue stream.
The best defense sector stocks got a further shot in the arm with growing uncertainty amid rising geopolitical tensions necessitating the need for advanced defence technologies.
Among the best defense stocks to invest in is the stock that experienced rise, fall and is now on the move again.
DroneShield Limited (ASX: DRO)
DroneShield Limited (ASX: DRO) has initiated a major upgrade for its global counterdrone devices, enhancing detection accuracy and adding features like locational display options among others.
It initiated a significant update rollout across its global fleet of counterdrone (C-UAS) devices, responding to end user requests. The update encompasses enrolled devices worldwide equipped with DroneShield's artificial intelligence-based drone detection engine, RFAI, across the full product range, including portable, vehicle/ship, and fixed-site devices.
DroneShield's strategic expansion includes a larger Sydney facility and participation in addressing increased drone threats amid geopolitical tensions.
Drone threat continues to evolve and escalating in modern conflicts. To meet the growing need for advanced Counter-UxS solutions, the company received repeat U.S. Government order of $5.7 million contract for several of DroneShield’s CUxS solutions.
DroneShield received an order of $4.7 million for a high-profile Government agency as end customer. It is to provide multiple vehicle-based counterdrone-drone (C-UxS) systems, which can offer a fast deployable C-UxS platform, that can be operated in both static and On-The-Move (OTM) missions for convoy and mobile VIP protection.
The company, with proven counterdrone systems, diversified revenue streams, and a strong global presence is fast becoming profitable. DroneShield is poised for significant growth in both the short and long term, evident from its recent transformative activities and robust performance in FY23. The company has outlined an ambitious 5-year target, aiming to achieve annual revenues ranging from $300-500 million. This target includes an emphasis on diversifying revenue streams, with an expectation that 50% of the revenue will be derived from Software as a Service (SaaS) and software Research and Development (R&D).
Another Defense Company Stock that is accelerating its production and delivery is
Electro Optic Systems Holdings Limited (ASX: EOS)
Electro Optic Systems Holdings Limited (ASX: EOS) in its financial performance update for the period ending 30 June 2024, reported robust financial results for the first half of 2024, with unaudited revenue reaching approximately $142.6 million, marking a substantial 92% increase from the same period last year. This growth was driven by strong performance across all business segments, including accelerated production and delivery of Remote Weapons Systems (RWS) to a Middle Eastern client, as well as expansions in the EM Solutions and Space Technologies sectors.
In the fiscal year ending 31 December 2023, Electro Optic Systems Holdings Limited (EOS) achieved robust revenue growth from its Continuing Operations, reaching $219.3 million, marking a 59% increase compared to the previous year's $137.9 million.
Electro Optic Systems is strategically positioning itself for growth through initiatives aimed at expanding market presence and enhancing technological capabilities. The company's joint venture with Shielders Advanced Industries for local manufacturing of Remote Weapon Stations (RWS) in the Middle East strengthens regional operations, meeting defense requirements more effectively. Simultaneously, EOS is diversifying its product portfolio with advanced technologies like High Energy Laser Weapons (HELW), underscoring its commitment to innovation and adapting to evolving defense needs. These strategic moves bolster EOS's competitiveness and open avenues for increased revenue and sustained growth in the dynamic defense sector.
Source: Company's Report
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