Assessing Draganfly (CNSX:DPRO) Valuation After New Search And Rescue Sweden Drone Deployment

Draganfly (CNSX:DPRO) is back on investors’ radar after Search and Rescue Sweden selected its APEX and Commander 3XL drones, integrated with Smith Myers’ ARTEMIS mobile phone detection systems, for national search and rescue missions. See our latest analysis for Draganfly. The recent search and rescue win comes alongside a 57.06% 1 month share price return and a 33.04% year to date share price return. The 1 year total shareholder return of 169.78% contrasts with weaker 3 and 5 year total shareholder returns, suggesting momentum has recently picked up after a difficult longer stretch. If this kind of aerospace and defense use case interests you, it could be a good moment to see what else is setting up in aerospace and defense stocks. With the share price already up strongly over the past month and year, along with rapid revenue growth alongside continued losses, the key question is whether Draganfly is still mispriced or if the market is already accounting for future growth. Preferred Price to Sales of 42.5x: Is it justified? Draganfly last closed at CA$13.57, and the market is currently valuing its revenue at a P/S of 42.5x, which stands well above peers. The P/S multiple compares a company’s market value to its revenue and is often used when businesses are not yet profitable. For a company like Draganfly, which is still loss making, investors often lean on P/S to gauge how much they are paying today for each dollar of current sales as a rough proxy for potential future scale. Here, the P/S of 42.5x is high compared to several benchmarks. The North American Aerospace and Defense industry average sits at 3.7x, so Draganfly’s multiple is many times higher than what investors are paying for revenue in the broader peer group. Against its own peer set, the peer average P/S of 4.7x is also far lower. In addition, the estimated fair P/S ratio for Draganfly is 9.7x. This is a level the market could move toward if enthusiasm around growth and profitability expectations cools, or if revenue trends do not align with such a premium. Explore the SWS fair ratio for Draganfly Result: Price-to-Sales of 42.5x (OVERVALUED) However, there is still the risk that a P/S multiple of 42.5x proves hard to defend if the rapid 53.54% revenue growth slows or if the ongoing CA$18.08 million losses persist. Find out about the key risks to this Draganfly narrative. Build Your Own Draganfly Narrative If you see the numbers differently or simply want to test your own view against the data, you can build a fresh narrative in just a few minutes: Do it your way. A great starting point for your Draganfly research is our analysis highlighting 1 key reward and 3 important warning signs that could impact your investment decision. Looking for more investment ideas? If you are serious about sharpening your portfolio, do not stop at a single stock. Use the screener to spot new angles before everyone else catches on. Target potential value by scanning these 883 undervalued stocks based on cash flows that align with your tolerance for risk and your expectations on future cash flows. Spot early movers in artificial intelligence by filtering for these 25 AI penny stocks that match the themes you care about most. Strengthen your income focus by checking these 12 dividend stocks with yields > 3% that fit your preferred yield range and payout profile. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.