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Why Hasn’t Dragonfly Performed?

Timmothy Collins looks at a company that is meeting expectations with a stock that isn't.
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Timothy Collins has had his eye on the drone tech company Draganfly  DPRO  for quite a while now. Yet ever since he began investing in it and writing about it, Draganfly hasn’t delivered the performance that Collins expected (or wanted). This begs the question… what gives?

“What’s wrong with drone technology company Draganfly?” Collins wrote recently on Real Money. “That’s the question folks have been asking me for about two months now. The answer is nothing. Nothing is wrong with the company. The stock's price action has been a different story, but eventually those two worlds will come back together.”

Recently, DPRO announced a $9 million exclusive manufacturing agreement with Digital Dream Labs, Collins noted.

“As part of the deal, Digital Dream Labs will order at least 50,000 units with delivery starting in 2022. Note some key words here: "minimum" and "at least." The $9 million is a baseline. Based on the wording, I believe there is a strong chance the total will easily land in the low eight figures. Additionally, DPRO has the first right of refusal to manufacture subsequent drones or unmanned aerial vehicles for Digital Dream Labs."

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In any event, revenue forecasts are on the rise. "This one contract will likely match most, if not all, of 2021's revenue. Less than a month ago, DPRO received a $400,000 initial order from Valqari Drone Delivery Stations. Again, a new client, and one taken from a competitor; and, again, a number that was a minimum base. Both of these contracts expand Draganfly's reach into new sector with consumer electronics and last-inch delivery.”

For Collins, Draganfly is a classic case of fundamental analysis vs. technical analysis. If you look at the charts, DPRO still doesn’t necessarily look like a good bet. They had a crypto-like jump at the beginning of 2021, but since then share prices have fallen almost continuously.

When you look at the company, though, Collins sees an entirely different picture.

“I've been wrong on the price action, but not on company execution. Since this is a long-term hold, I don't love the price action; however, as long as the fundamental execution is there, I'm not going anywhere.”