Droneshield vs Zip shares: Which ASX tech stock is better for growth investors?

Trying to choose between Droneshield Ltd (ASX: DRO) and Zip Co Ltd (ASX: ZIP) for your next growth-focused investment? Both are prominent names in Australia’s tech scene, but they offer very different business models and risk profiles. Droneshield is making waves with its counter-drone technology, while Zip is a key player in digital buy-now, pay-later finance. Here’s how they stack up for those seeking the next big thing.

The case for Droneshield

Droneshield is an Australian innovator focused on artificial-intelligence-powered solutions that detect and counter drones—a growing global threat for governments, defence forces, airports, and commercial venues. Its product suite features DroneGun Tactical, RfPatrol, and DroneSentry, among others. These technologies are already in use protecting infrastructure and assets in Australia, the US, and the UK.

Looking at Droneshield’s fundamentals:

• It has a market cap of $1.57 billion, promising for a company outside the mainstream ASX 100.
• The P/E ratio is reported at an eye-watering 433.75, and earnings per share are negative at -0.033, indicating the business is still burning through cash as it scales up. Note: Droneshield’s reported P/E ratio may be based on a different earnings measure (e.g. underlying or forward earnings) than the EPS figure shown, which is why they may appear inconsistent.
• Year-to-date, its share price is down 47.6% — a stark reminder of the volatility that comes with early-stage growth stocks.

Droneshield pays no dividend, opting instead to reinvest in its technology and growth pipeline.

The case for Zip

Zip is an established fintech best known for its Zip Pay and Zip Money platforms. The company offers interest-free buy-now, pay-later services across 12 countries, including major operations in Australia, New Zealand, and the US. Zip Co is a pioneer in delivering digital tools that help consumers split and manage payments, challenging traditional credit providers and tapping into a rapidly shifting payments landscape.

A glance at Zip Co’s metrics:

• It boasts a larger market cap at $2.53 billion, putting it among the more notable fintechs on the ASX.
• The P/E ratio sits at 22.30—a far more conventional number compared to Droneshield, with positive earnings per share of 0.091. This suggests Zip has moved past the loss-making start-up phase and into sustainable profitability.
• Like Droneshield, Zip doesn’t pay a dividend, choosing growth over income for now. Its YTD return is -38.6%, still deeply negative but slightly better than Droneshield’s.

Valuation comparison

Metric	Droneshield	Zip
Market Cap	$1.57 billion	$2.53 billion
P/E Ratio	433.75	22.30
Earnings per Share (EPS)	-0.033	0.091
Dividend Yield	0.00%	0.00%
YTD Return	-47.6%	-38.6%

Note: Droneshield’s negative EPS and its reported P/E ratio appear inconsistent, likely due to different calculation bases (forward/underlying earnings). For both, dividend yields sit at zero—a standard feature of high-growth tech names investing for the future.

Recent share price momentum

Comparing recent share price perfomance up to 30 September 2026:

• Droneshield closed at $1.70, up 4.95% on the day. Its price action across September has been volatile, but the late-month rally could hint at fresh investor interest or news flow.
• Zip finished at $2.03 on the same date, up just 0.5% for the session. Zip’s September showed a mix of sharp down days and small gains, reflecting ongoing uncertainty but also a willingness for traders to buy the dips.
• Both remain well below their January levels, with Droneshield lagging more sharply YTD.

Which is the better buy?

For growth investors, I’d lean toward Zip right now, even with its own sizeable share price slump. Zip has reached profitability, giving it a lower and more grounded P/E ratio, and offers greater operational scale as seen in its higher market cap and international reach. While Droneshield is an exciting play in the defence tech space, it remains loss-making and considerably more volatile—its negative EPS and extremely high P/E imply a lot of hope is baked in, but earnings haven’t caught up yet.

If you’re comfortable with risk and want “moonshot” potential, Droneshield could be your ticket—a single contract or regulatory change could turbocharge its prospects. But for most growth-focused portfolios, I think Zip offers the better balance of proven scalability and upside at today’s prices. Of course, neither is for the faint-hearted, and sharp reversals are always possible.

The post Droneshield vs Zip Co: Which tech share is the better ASX growth pick? appeared first on The Motley Fool Australia.

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Motley Fool contributor Laura Stewart 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. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial draft. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.

It was a busy week for Australia’s top brokers. This has led to a number of broker notes being released. 

Three broker buy ratings that you might want to know more about are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

Megaport Ltd (ASX: MP1)

According to a note out of Bell Potter, its analysts have initiated coverage on this cloud infrastructure provider’s shares with a buy rating and $27.00 price target. Bell Potter believes Megaport is exceptionally well-placed for growth over the coming years thanks to strategic contracts which are being rolled out this year. In fact, the broker believes that underlying EBITDA will grow from $77 million in FY 2026 to $329 million in FY 27 and then $726m in FY 2028. Importantly, it notes that all the capex required for the roll out of the strategic contracts is fully funded. Bell Potter also highlights that Megaport is trading on an FY 2028 EV/EBITDA multiple of around 7x, while the median multiple of the domestic comps is around 15x and international comps is around 11x (based on 2027 forecasts). The Megaport share price ended the week at $22.34.

Navigator Global Investments Ltd (ASX: NGI)

A note out of Morgans reveals that its analysts have retained their buy rating and $3.04 price target on this global investments company’s shares. The broker notes that Navigator Global has agreed to sell a stake in Invictus Capital Partners to New York Life Investment Management. It points out that the sale crystallises a premium of up to ~8% to cost on the initial 12.7% stake, while the company keeps its carry and future upside through a residual 8.3% stake. The good news is management believes the retained stake could be worth meaningfully more, on a pro-rata basis, when it is transferred in 2031, helped by the New York Life Investment Management partnership. In Morgans’ view, the sale shows the optionality and embedded value in its portfolio. The Navigator Global share price was fetching $2.30 at Friday’s close.

Netwealth Group Ltd (ASX: NWL)

Another note out of Bell Potter reveals that its analysts have retained their buy rating on this investment platform provider’s shares with a reduced price target of $25.00. The broker has updated its model to reflect equity market movements and commentary on net flow expectations. Bell Potter believes that consensus forecasts are too high. It notes that they imply that net inflows would be run rating at the upper end of the $18 billion to $20 billion guidance range during the final six weeks of the first quarter despite equity markets weakening. Nevertheless, the broker remains positive and sees value in its shares at current levels. As a result, it thinks investors should be buying the dip. The Netwealth share price ended the week at $17.21.

The post Top brokers name 3 ASX shares to buy next week appeared first on The Motley Fool Australia.

More reading

• Tech shares shine while ASX 200 plunges to 4-month low
• Top ASX shares to buy in October 2026
• 3 ASX 200 shares I would buy and hold for 10 years
• Zip vs Megaport: Which ASX tech share is the better buy?
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Motley Fool contributor James Mickleboro has positions in Megaport. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Megaport and Netwealth Group. The Motley Fool Australia has positions in and has recommended Netwealth Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Association of Superannuation Funds of Australia (ASFA) calculates that a comfortable retirement will cost single Australians approximately $56,166 per year.

To fund that, the association assumes that a single retiree will need a superannuation balance of at least $630,000.

That’s the minimum amount you’ll need to have stashed away to be able to afford the retirement lifestyle you want.

But what if you didn’t live off your superannuation balance at all?

Instead of steadily drawing down on your superannuation capital to cover retirement lifestyle expenses, what if you could earn enough passive income to cover your living expenses?

This would let your superannuation balance keep compounding. Instead, you’d live solely off the income it generated.

It’s very possible.

Here’s how it could work.

How much superannuation do I need to generate $56,000 per year in passive income?

The calculation is relatively straightforward. You’ll need to divide your annual passive income by the overall dividend yield of your investment portfolio.

The tricky part is that the answer varies depending on what that dividend yield is.

Generally, as the dividend yield of your portfolio increases, the superannuation balance you need to earn the same passive income goes down.

It means, for example, that a portfolio yielding around 6% only needs to be half the size of one with a dividend yield of around 3% to generate the same level of passive income.

How much do I need if my portfolio yields, 4% to 6%?

If your overall portfolio has a dividend yield of 4%, you’ll need a superannuation balance of around $1.4 million. That’s because $56,000 ÷ 4% = $1.4 million.

If your portfolio yield is a little higher, at around 5%, your balance will need to be closer to $1.12 million to earn the same amount.

Raise that to 6% and you’ll need around $934,000 to earn $56,000 per year in passive income.

Remember that not every ASX share in your portfolio needs to yield the same amount. What matters is the overall dividend yield of your portfolio.

Ideally, you want to buy shares with various yields to hedge against volatility and protect your portfolio from fluctuating prices.

You don’t need to invest the whole sum in one go. Start with regular monthly investments and let compounding do some of the hard work for you.

What ASX shares pay a dividend yield between 4% and 6%?

Several options are available at this level, but here are my top picks.

Large blue-chip companies like BHP Group Ltd (ASX: BHP), National Australia Bank Ltd (ASX: NAB) and Woodside Energy Group Ltd (ASX: WDS) pay around the 4-6% level.

Elsewhere, defensive shares like Telstra Group Ltd (ASX: TLS), Origin Energy Ltd (ASX: ORG), AGL Energy Ltd (ASX: AGL), or Amcor PLC (ASX: AMC) are another solid choice for income-seeking investors. These picks could be particularly advantageous in the current environment, marked by rising inflation and heightened volatility.

The post How much superannuation do I need to earn $56,000 per year in passive income? appeared first on The Motley Fool Australia.

More reading

• If I invest $15,000 in Woodside shares, how much passive income will I receive in 2027?
• BHP vs Codan: Which ASX 200 share is the stronger buy today?
• How many Woodside shares do I need to buy for $1,000 per month of passive income?
• Fortescue vs National Australia Bank: Which ASX blue chip is the better buy this month?
• 5 things to watch on the ASX 200 on Friday

Motley Fool contributor Samantha Menzies has positions in BHP Group. 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 Amcor Plc and Telstra Group. The Motley Fool Australia has recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.