Down 12% since Thursday, has the DroneShield share price topped out?

The DroneShield Ltd (ASX: DRO) share price is catching more headwinds today.

Shares in the All Ordinaries Index (ASX: XAO) drone defence company closed down 7.0% yesterday at $1.53. In late morning trade on Tuesday, shares are swapping hands for $1.50 apiece, down 1.6%.

With shares having also lost 3.5% on Friday, the DroneShield share price has now shed 11.8% since Thursday’s closing bell.

So, is the dream run over for this All Ords tech stock darling?

Let’s have a look.

Has the DroneShield share price topped out?

To get a clearer picture of what’s ahead for the DroneShield share price, we need to take a step back to see what’s been happening with the stock in recent months.

First, last Thursday’s closing price of $1.70 a share represented a new all-time high for the company. That saw the stock up 77% over one month and up an eye-popping 359% in 2024.

With that kind of blazing success in the rearview mirror, a little shareholder profit-taking isn’t unexpected.

Though I believe that investors who’ve been selling these past few days may well look back with some regret.

The DroneShield share price could certainly go lower from here and remains vulnerable to a broader market pullback if the global tech rally fizzles. But there are good reasons investors have been sending the stock flying higher. And those reasons have not changed.

Why the ASX All Ords tech stock could keep flying higher

Investors have been bidding up the DroneShield share price on the back of the company’s tremendous growth achievements and an impressive pipeline indicating that growth looks set to continue.

Thursday’s record-high closing price was achieved after the company reported on another $4.7 million order from a new non-government Swiss international customer. The company has been a frontrunner in incorporating AI technology into its systems.

Commenting on the new Swiss order, DroneShield’s CEO, Oleg Vornik said:

This order highlights DroneShield expertise not only as a maker of cutting-edge AI-based C-UAS sensor and effector technologies, but also a system integrator, for demanding applications that involve multiple sensor and effector modalities, operating in tough conditions.

The company has been racking up new orders at an impressive level.

How impressive?

Well in the first quarter of FY 2024 the company reported revenue of $16.4 million, up a whopping 900% from Q1 FY 2023. Looking back to the prior year, DroneShield raked in $55 million in revenue in 2023, up 223% from the prior year.

And the DroneShield share price looks set to keep on giving as that earnings growth is forecast to continue.

According to CommSec analyst forecasts, earnings per share (EPS) will come out to 3.1 cents in 2024, up from 2.0 cents in 2023. EPS is forecast to grow to 4.5 cents in 2025 and then hit 6.3 cents in 2026.

So, has the DroneShield share price topped out?

In the short-term, perhaps.

But longer term, I think the growth story remains in play, and this ASX All Ords tech stock can fly a lot higher.

The post Down 12% since Thursday, has the DroneShield share price topped out? appeared first on The Motley Fool Australia.

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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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.