Needham initiates coverage on Draganfly stock with Buy rating

Investing.com - Needham initiated coverage on Draganfly Inc. (NASDAQ:DPRO) with a Buy rating and a $20.00 price target on Thursday, representing significant upside from the current price of $8.55. According to InvestingPro data, analyst targets for DPRO range from $6.91 to $14.01, with the stock currently appearing overvalued based on InvestingPro’s Fair Value assessment.

The research firm believes the unmanned aerial systems (UAS) industry is entering a multi-year supercycle and views Draganfly as a uniquely positioned pure-play drone company poised to capture accelerating demand across North America.

Needham notes that Draganfly, headquartered in Canada, stands to benefit from Canada’s record defense investments while simultaneously participating in the U.S. drone market through potential high-volume defense programs. The company has demonstrated revenue growth of 17.08% in the last twelve months, with analysts forecasting 39% growth for the current fiscal year.

Beyond defense applications, the firm believes DPRO is positioned to capitalize on rapid expansion of commercial drone adoption, supported by Beyond Visual Line of Sight (BVLOS) regulatory shifts in North America. While DPRO holds more cash than debt on its balance sheet, InvestingPro data shows the company is not yet profitable, with an EBITDA of -$11.25 million in the last twelve months.

Needham suggests these industry tailwinds, coupled with potential mergers and acquisitions, position Draganfly for revenue inflection and industry-leading growth. With earnings scheduled for November 11 (in 12 days), investors seeking deeper insights can access the comprehensive Pro Research Report available on InvestingPro, which includes additional financial metrics and analysis on this volatile stock that has delivered a remarkable 227% return over the past year.

In other recent news, Draganfly Inc. has been actively involved in multiple developments that could impact its operations and growth. The company has announced a collaboration with Palladyne AI Corp. to integrate Palladyne’s Pilot AI software into its drone platforms, enhancing autonomous capabilities. In another significant development, Draganfly was selected by the U.S. Army to provide Flex FPV drone systems, including establishing on-site manufacturing capabilities at overseas facilities. Additionally, Draganfly showcased its Commander 3XL and Flex FPV drone systems at the U.S. Department of Defense Technology Readiness exercise, highlighting its advanced capabilities in a competitive setting.

H.C. Wainwright has raised its price target for Draganfly twice, first from $6 to $9, and more recently from $9 to $14, maintaining a Buy rating each time. This adjustment reflects the company’s recent business announcements and favorable trends in the drone technology sector. Furthermore, Draganfly is positioned to support Canada’s $220 million military aid package to Ukraine, which focuses on drone and counter-drone capabilities. These developments underscore Draganfly’s expanding role in both defense and commercial drone markets.

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