ASX retail stock Temple & Webster Group Ltd (ASX: TPW) is getting hammered, plunging 17% to a new 52-week low of $4.18 on Wednesday.

The stock is down 70% in 2026 and 82% over 12 months, vastly underperforming the S&P/ASX 200 Index (ASX: XJO).

And yet, the online retailer just delivered record revenue and stronger profitability. So, what’s going on?

Temple & Webster keeps growing

This $600 million ASX retail stock is one of Australia’s leading online retailers, selling hundreds of thousands of homewares, furniture, and home improvement products.

And here’s a key part of the model: most products are shipped directly from suppliers. That gives Temple & Webster a remarkably capital-light model for the sheer volume of products flowing through its platform.

Today’s numbers show the business is still moving forward. Revenue climbed 10.6% to $664.6 million, while EBITDA rose 16.6% to $21.9 million. Strip out foreign exchange effects, and underlying EBITDA jumped an impressive 28% to $25.9 million.

Delivered margin improved 5.5% to $201 million, while the company ended FY26 with $122.7 million in cash after spending $30 million on share buybacks.

Customer metrics were encouraging, too. Market share increased to 2.9%, active customers rose 5% to about 1.3 million, and repeat customers generated 62% of all orders, up from 59%.

There are growth engines beyond the core business, too. Exclusive product lines and adjacent businesses are now generating more than $100 million in annual revenue. The New Zealand operation contributed $3 million since launching in October 2025, while home improvement revenue surged 39%.

Temple & Webster also generated $24 million in operating cash flow, while fixed costs fell as a percentage of revenue.

What did management say?

Executive Chair Mark Coulter said:

Despite a challenging environment, we have been able to deliver record annual revenue of $665 million, while materially improving the underlying profitability of the business through several margin optimisation initiatives. These initiatives, combined with the flexibility of our operating model, resulted in our Underlying EBITDA (excluding unrealised foreign exchange losses) increasing by 28% vs pcp to $26 million.

What’s next for Temple & Webster?

Here’s where things get interesting for the ASX retail stock. Temple & Webster is targeting FY27 EBITDA of $33 million to $40 million, implying roughly 50% to 80% growth from FY26.

Management wants to return to double-digit revenue growth by leaning harder into digital and AI innovation, strengthening its core online offering, and scaling home improvement and New Zealand.

New CEO Susie Sugden is also expected to outline the next phase of the strategy at the AGM and first-half results, with the company targeting further growth in Australia’s $40 billion-plus homewares and furniture market.

Foolish takeaway

The market appears to be demanding faster growth from the ASX retail stock, despite the strong FY26 result.

That disconnect between solid execution and lofty expectations could be the key to understanding this brutal sell-off.

The post Why is this ASX retail stock crashing to new lows today? appeared first on The Motley Fool Australia.

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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 Temple & Webster Group. The Motley Fool Australia has recommended Temple & Webster Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

DroneShield Ltd (ASX: DRO) shares have been hammered, falling 19% over the past month, 39% year to date, and 54% over 12 months.

But after disappointing 2026 guidance, could the sell-off of the ASX tech stock have gone too far?

Counter-drone spending leads to orders

DroneShield’s technology is designed to detect, identify, and defeat drone threats, with customers across military, government, law enforcement, and critical infrastructure.

The demand story is already becoming tangible. By late July, the company had secured $206 million of committed FY26 revenue, almost matching its entire FY25 revenue with five months of the year still remaining.

It’s promising and crucial for DroneShield shares that counter-drone spending is translating into real orders, rather than simply representing an attractive future market.

The next challenge is delivering as demand grows

The company is expanding its global production footprint, including establishing manufacturing operations in Europe, and expects combined annual production capacity to reach around $2.4 billion by the end of 2026.

DroneShield is also continuing to invest in its technology. Management has described its current product rollout as the most significant product cycle in the company’s history, with further releases expected through 2027.

Its existing hardware can also gain additional capabilities through software subscriptions as the company’s radio-frequency intelligence dataset grows.

If the counter-drone market continues expanding, the combination of technology, manufacturing scale, and an established customer base could put DroneShield in a strong position to capture that demand.

There’s a big catch: valuation

DroneShield shares trade on high P/E multiples, meaning investors are already pricing in substantial future growth. That can be justified if the company becomes considerably larger over the long term. However, it also leaves little room for disappointment.

Investors got a reminder of that on 28 July. DroneShield released a calendar 2026 trading update alongside a new contract announcement. While the operational numbers were strong, management’s guidance disappointed the market.

The company expects FY26 revenue of $250 million to $270 million, representing growth of 15% to 25% on FY25. The problem? Consensus expectations had been closer to $323 million.

The result was a sharp DroneShield share price decline, with profit-taking adding to the pressure.

Short sellers are also taking aim. DroneShield is currently the most shorted ASX share, with short interest of 15.7%.

What do brokers think?

No wonder analysts are divided on DroneShield shares.

TradingView data shows two of four brokers at strong buy and two at sell or strong sell. The average price target is $2.13, implying about 12% upside, while the most bullish target of $2.80 implies roughly 47% upside. The bearish target of $1.60 suggests another 16% downside.

Canaccord Genuity is among the bulls, retaining a buy rating and $2.80 price target.

So, is there upside left? There could be, but DroneShield now needs to prove it can convert its enormous opportunity into sustained earnings growth.

The post Is the DroneShield share price now too cheap to ignore? appeared first on The Motley Fool Australia.

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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 Judo Capital Holdings Ltd (ASX: JDO) are deeply in the red over a 12-month period, but after the release of the company’s results this week, brokers are tipping a rebound.

The shares fell sharply in late June after the company announced a downgrade in expected pre-tax earnings from $180-$190 million down to $163-$169 million.

Over a 12-month period the company’s shares are 39.6% lower.

But after the company’s results this week, the analyst teams at both Morgans and Macquarie are tipping some serious share price upside for the stock.

Judo looking forward after solid profit result

Let’s have a quick look at what Judo reported this week.

The company reported a pre-tax profit of $168.1 million, up 34%, with Judo saying this reflected strong revenue growth.

Judo enjoyed above system lending growth, with gross loans and advances of $14.7 billion, up 18% year on year, at the top end of guidance.

Deposit balances also grew 24% to $12.2 billion.

Judo is expecting pre-tax profit to come in at $210-$220 million for the current year.

Chief Executive Officer Chris Bayliss said regarding the result:

FY26 has been another year of genuine momentum for Judo. While the increase in specific provisions late in the year was disappointing, the underlying performance of the Bank has remained strong, with record revenue, continued operating leverage, strong deposit growth and lending at the top end of guidance. We have continued to deliver above-system growth, underpinned by our customer value proposition of smarter judgement, faster decisions, and stronger relationships. With major investments in our core technology platforms behind us, we are now focused on delivering operating leverage and driving our return on equity. As we continue to scale the loan book, we are seeing more of our revenue growth translate to profit growth. Our cost to income ratio has improved significantly to now be the lowest in the sector3, and will keep improving as we scale.

Judo Capital shares looking cheap

Macquarie said in a note to its clients that the question is, “whether Judo is able to achieve that balance between margins, growth, and credit quality to achieve returns at scale”.

The analysts said while it was difficult to be certain, “we think the valuation discount adequately compensates the risks”.

Macquarie has a price target of $1.65 on Judo shares compared to $1.06 currently.

Morgans meanwhile said they expected earnings growth to be in the strong double digits from FY28-FY28.

They said:

Short-term target price is $1.42/share, but we think by the end of this decade JDO could be worth close to $2/share. JDO is higher risk and more cyclically exposed than the major banks, but investors are compensated by higher potential returns at current prices.  

The post How high will Judo Capital shares go? Brokers have their say appeared first on The Motley Fool Australia.

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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 positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.