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Would Shareholders Who Purchased DroneShield's (ASX:DRO) Stock Year Be Happy With The Share price Today?

Simply Wall St
·3 min read

It is a pleasure to report that the DroneShield Limited (ASX:DRO) is up 44% in the last quarter. But that doesn't change the reality of under-performance over the last twelve months. After all, the share price is down 40% in the last year, significantly under-performing the market.

See our latest analysis for DroneShield

Given that DroneShield didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last twelve months, DroneShield increased its revenue by 44%. That's definitely a respectable growth rate. Meanwhile, the share price is down 40% over twelve months, which is disappointing given the progress made. You might even wonder if the share price was previously over-hyped. But if revenue keeps growing, then at a certain point the share price would likely follow.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

earnings-and-revenue-growth
earnings-and-revenue-growth

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

The last twelve months weren't great for DroneShield shares, which performed worse than the market, costing holders 40%. The market shed around 0.3%, no doubt weighing on the stock price. Shareholders have lost 0.8% per year over the last three years, so the share price drop has become steeper, over the last year; a potential symptom of as yet unsolved challenges. We would be wary of buying into a company with unsolved problems, although some investors will buy into struggling stocks if they believe the price is sufficiently attractive. It's always interesting to track share price performance over the longer term. But to understand DroneShield better, we need to consider many other factors. To that end, you should learn about the 5 warning signs we've spotted with DroneShield (including 2 which is make us uncomfortable) .

But note: DroneShield may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on AU exchanges.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.