Forget Fortescue shares: This ASX stock could be poised for a bull run in 2024

On the hunt for an ASX stock that looks well-placed for a bull run in 2024?

It may be tempting to look at big-name companies like S&P/ASX 200 Index (ASX: XJO) mining stock Fortescue Metals Group Ltd (ASX: FMG).

Indeed, Fortescue shares have had a terrific run over the past year.

The Fortescue share price is up 28% over 12 months, and the ASX 200 miner has gained 44% just since 13 September.

But there’s a smaller ASX stock that’s been outpacing those juicy gains. And it could have an even bigger year ahead in 2024.

ASX stock defending the skies

The company in question is Droneshield Ltd (ASX: DRO).

The ASX tech stock is up 66% over 12 months, with shares having gained a whopping 164% since the 28 June lows.

Business has been booming for the drone defence company. And you need only skim global news headlines to see why.

From nation-based militaries to paramilitary organisations, the use of armed drones in global conflicts is increasing at a frightening pace. The Australian Navy has recently come under scrutiny for its own vulnerabilities to potential hostile drone attacks.

For the December quarter, the ASX stock reported an all-time high of $48 million in customer cash receipts and grants. With 80% of its revenues derived from repeat customers, that adds some sustainability to the outlook of future sales.

And the company pleased investors by recording its maiden before tax profit of $4 million for calendar year 2023. That was a big improvement from the loss of $2.9 million in 2022.

Droneshield’s balance sheet also looks solid, with the company holding a cash balance of $58 million as at 31 December.

On the growth front, the ASX stock had a $30 million contracted order backlog entering 2024 along with a sales pipeline of more than $400 million.

At the time of the update, Droneshield CEO Oleg Vornik said, “We are seeing continuing peak demand from our customer base globally … and we are ready operationally to meet this demand.”

So, if you’re looking for an ASX stock poised for a bull run in 2024, forget Fortescue shares and have a deeper look into Droneshield.

The post Forget Fortescue shares: This ASX stock could be poised for a bull run in 2024 appeared first on The Motley Fool Australia.

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More reading

• Up 80% in 6 months, is a monumental earnings boom just around the corner for this tiny ASX stock?
• Why is the DroneShield share price jumping to a 52-week high today?
• Buying Droneshield shares? Here’s how the company is harnessing the AI revolution
• Here’s how the ASX 200 market sectors stacked up this week
• The DroneShield share price just clocked a 7-year high. Here’s why

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended DroneShield. The Motley Fool Australia has recommended DroneShield. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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