After soaring 310% in 2025, are Droneshield shares still a buy in 2026?

Droneshield Ltd (ASX: DRO) shares ended 2025 on a high, up 310.67% from when the ASX opened for the first day of the year, to be exact.

At the time of writing on Friday afternoon, the first day the ASX has opened for 2026, the shares are up another 5.52% and are changing hands for $3.25 each.

What happened to Droneshield shares in 2025?

Droneshield shares peaked at an all-time high of $6.60 each in early October. The share price then began a slow and steady tumble back to levels seen earlier in the year.

By the end of the year, the shares had fallen 53.33% from their peak.

During the first 9 months of 2025, the counter-drone technology developer benefited from several tailwinds. A substantial increase in global defence spending was the key driver of share price growth amid ongoing geopolitical tensions. 

In mid-October, a market meltdown on Wall Street spooked some investors. But other than that, there wasn’t any significant news out of the company during the month to explain the sell-off.

In the same month, the company revealed it had launched a new software program, DroneSentry-C2 Enterprise (C2E) platform. It also posted a record 1,091% increase in quarterly revenue.

The absence of any real news to explain the tumbling share prices suggests that the downturn was caused by investors taking their profits following very strong gains.

But the downward spiral didn’t end there. 

Later, in November, the company released an update relating to share options. It said that almost 44.5 million performance options were vested on the 5th November after it met a performance hurdle of $200 million cash receipts in a 12-month rolling period.

This was shortly followed by another ASX announcement that CEO Oleg Vornick sold 14.81 million shares between 6 and 12 November. The shares totalled $49.79 million. There was no other price-sensitive news out of the company, but this type of selling activity tends to raise red flags for investors. It implies that management thinks the stock is overvalued. 

Droneshield shares appeared to reach the bottom at $1.72 a piece in late November and have now recovered around 88% at the time of writing.

So what’s ahead for Droneshield in 2026?

It looks like Droneshield shares have well and truly hit the bottom and are now continuing their recovery. We’re still a long way from the all-time peak seen last October, but I’m confident that the company’s growth strategy this year will put Droneshield shares back on track after a volatile end to 2025.

Analysts are bullish about the shares, too. TradingView data shows analyst consensus of a strong buy rating on Droneshield shares. The average 12-month target price is $4.70, which implies a 43.29% upside at the time of writing. However, some think the increase could be as high as 52.44% to $5 a piece in 2026.

The post After soaring 310% in 2025, are Droneshield shares still a buy in 2026? appeared first on The Motley Fool Australia.

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Motley Fool contributor Samantha Menzies 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.