DroneShield Ltd (ASX: DRO) shares are in freefall, and investors are starting to ask an uncomfortable question.

The counter-drone technology company closed at $1.60 on Monday, a fresh 52-week low, leaving the share price a staggering 76% below its previous high of $6.70, reached at the end of October last year.

When a stock falls that hard, the temptation to call a bottom gets stronger. But is the risk-reward actually tempting enough to buy? Or is this a falling knife dressed up as a bargain?

The demand story hasn’t gone anywhere

The numbers tell a grim story. DroneShield shares are down 20% over the past month and 49% over the past year. For a stock that was once one of the ASX’s hottest momentum plays, this is a stunning reversal of fortune.

Here’s the twist, though. While the share price has collapsed, the underlying business case hasn’t. Drones are not going away. If anything, they’re becoming more central to modern warfare, border security and the protection of critical infrastructure. That means governments and defence customers still need systems that can detect, track and stop them.

DroneShield is actually converting that demand into hard revenue. Its latest update showed FY26 committed revenue had reached $251 million, with a further $46 million already committed for FY27 and beyond. First-half revenue surged 74% to $125.8 million, while recurring revenue rocketed 229% to $11.5 million — a sign the business is shifting from one-off sales toward something stickier.

The company also landed its first order for its new RfRecon product from an existing Western European military customer. It’s not financially material yet, but it’s early validation for another product in an expanding range.

The catch: this is still a loss-making bet

None of that changes the fact that DroneShield is bleeding cash. First-half underlying EBITDA was $12.4 million in the red, and the statutory loss came in at $32.2 million.

DroneShield shares remain one of the highest-risk stocks on the ASX. Defence contracts don’t arrive on a neat schedule, so revenue can be lumpy and unpredictable.

The company is scaling fast, but investors still need proof that bigger revenue eventually turns into sustainable profit, not just bigger losses. And as governments pour more money into counter-drone systems, larger, better-funded defence contractors could pile into the same opportunity, squeezing DroneShield’s edge.

What are the brokers saying?

TradingView data shows just four analysts cover the stock — split evenly, with two buys and two sells.

The average 12-month price target for DroneShield shares sits at $1.99, roughly 24% above the current share price. Bell Potter is the most bullish at $2.40, with Canaccord Genuity close behind at $2.60.

Foolish takeaway

DroneShield isn’t a stock for the faint-hearted. The growth numbers are genuinely exciting, but the losses, volatility and competitive threats are just as real.

For risk-tolerant investors who believe in the counter-drone thematic, this pullback might be the entry point they’ve been waiting for. For everyone else, this is one to watch from the sidelines.

The post DroneShield shares just hit a new low. Is the only way up from here? appeared first on The Motley Fool Australia.

More reading

• DroneShield shares have crashed 51% in a year. Here’s why I’d buy them today
• Are DroneShield shares a buy at their 52-week low?
• These are the 10 most shorted ASX shares
• $10,000 invested in DroneShield and Core Lithium shares 3 years ago is now worth…
• DroneShield shares are down 75%. Could this huge short bet backfire?

Motley Fool contributor Marc Van Dinther 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.

Shares in water technology company Vysarn Ltd (ASX: VYS) are up more than 25% over the past 12 months, but according to the team at Morgans there is plenty left in the tank.

Deal failure leads to downgrade

This prediction comes despite the recent announcement that Vysarn had abandoned its proposed acquisition of NewGround, which it had announced in June.

Vysarn was to buy out NewGround for 33 million shares and $25 million in cash, with the deal expected to be 25% earnings per share accretive to Vysarn shareholders.

Morgans said the failure of the deal led them to downgrade their pre-tax profit expectations for Vysarn by 14% in FY27 and 19% in FY28, which would be the first full year of ownership.

But the broker added that Vysarn was now cashed up.

As they said:

Unwinding the cash consideration and noting the recent $65m raise – which included ~$15m for growth initiatives and working capital – the company has significant balance sheet optionality.

Morgans reduced its price target on Vysarn shares from $1.40 to $1.20, compared to 78 cents currently, but said it was still a solid business.

The broker said:

VYS is transforming into a multi-jurisdictional, vertically integrated water business. The company is continuously deploying cash into engineering, facilities management and consulting businesses, which is a sound strategy that should see the company continue to improve in quality. Moreover, the prospects of owning and selling water … continue to strengthen.

Solid growth in earnings

Vysarn’s FY26 operational revenue grew by 31% to $140 million, while net profit was up 41% to $15.1 million.

The company said of the result:

In FY2026, Vysarn continued to develop and execute its strategy to be a leading vertically integrated water services and infrastructure provider across multiple geographies and sectors in Australia. The Company maintained its trend of material year on year earnings growth delivered by the performance of its diversified water services across consultancy, hydrogeological drilling, test pumping, managed aquifer recharge (MAR) and wastewater treatment. While Vysarn’s growth to date has been underpinned by the iron ore sector in Western Australia (WA), the Company’s targeted pursuit of various diversified growth opportunities across other sectors and geographies is starting to bear fruit. The Company anticipates that meaningful organic growth in future periods will start to be driven by sectors and regions other than resources and WA.

The company said it would remain on the lookout for more acquisitions, and was also intending to invest heavily in senior management.

Vysarn is valued at $496.5 million.

The post This ASX water technology stock could jump 45% Morgans says appeared first on The Motley Fool Australia.

More reading

• Vysarn FY26 earnings: Revenue and profit surge

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

A comfortable retirement means something different to everyone, but having a target in mind for your retirement income brings peace of mind.

There are calculators online, such as the federal government’s Moneysmart calculator, which can show you how much in today’s dollars you are likely to have at retirement, depending on your current circumstances.

This is extremely useful as it allows you to adjust your superannuation contributions if you feel you’ll be falling short of what you need.

But how do you figure out what you need in the first place?

What is a comfortable retirement?

According to the Association of Superannuation Funds of Australia’s (ASFA) retirement standard, singles need $56,166 in income per year to have a comfortable retirement, while couples need $78,998.

Their definition of a comfortable retirement involves the ability to afford top-level private health cover, to own and maintain a reasonable car, to travel occasionally and to afford social activities.

Keep in mind, though, that ASFA’s standard assumes you own your own home and also draw a part pension once you hit the age of 67.

How much superannuation do I need to earn $70,000 per year in passive income?

Today we’re assuming you’re aiming for an income stream of $70,000 per year.

I will calculate this on the basis of dividends alone, with no drawdown of capital.

If you were able to earn a very high dividend yield of 10%, you’d need just $700,000 in retirement savings.

I’d suggest this level of earnings is unsustainable.

If you earned just 5% you’d need double this, at $1.4 million.

But I’d argue that with the benefit of franking credits, this is aiming too low.

So let’s assume you could earn 7.5%. In this case, you’d need $933,333 in superannuation savings.

Franking credits are crucial to this equation. If you invest in fully franked dividends, you get back all the tax the company has already paid.

This is because retirees are not taxed on their superannuation earnings.

In practical terms, this means a share paying a 5% dividend yield actually pays 7.14% once franking credits are included.

So what shares might help hit this target?

Real estate investment trusts can be solid investments.

Digico Infrastructure REIT (ASX: DGT) pays a 4.65% dividend, albeit unfranked, GPT Group (ASX: GPT) pays 5.38%, and Centuria Office REIT (ASX: COF) pays 11.36%.

Infrastructure stocks such as APA Group Ltd (ASX: APA) and toll roads operator Atlas Arteria Ltd (ASX: ALX) pay healthy dividends of 5.33% and 8.98%, respectively.

Among the utilities, Origin Energy Ltd (ASX: ORG) is paying 5.14% fully franked, AGL Energy Ltd is paying 5.9%, and Telstra Ltd (ASX: TLS) is paying 4.34%, 90% franked.

In the financial services sector, Regal Partners Ltd (ASX: RPL) is paying 11.53%, Bank of Queensland Ltd (ASX: BOQ) is paying 6.08%, and Westpac Banking Corporation (ASX: WBC) is paying 4.45%.

How to give your super a boost

If you want to top up your superannuation, it’s also worth reading up on concessional contributions, which are contributions you can make to your superannuation each year up to a cap of $32,500, which are only taxed at 15%.

Keep in mind that the $32,500 cap includes any employer contributions and salary sacrifice contributions.

The post How much superannuation do I need to earn $70,000 per year in passive income? appeared first on The Motley Fool Australia.

More reading

• Are Telstra shares a good buy for passive income?
• Westpac, ANZ, NAB or CBA shares? Which ASX bank stock should I buy for $5,000 a year in passive income?
• Worried about a recession? These ASX shares would be just fine
• How much is needed in superannuation to target a $6,500 monthly passive income?
• How much superannuation is needed to target $5,500 per month in passive income?

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