Drones are assuming tasks from farming to combat.
From the military to mining, drones are making industries around the world more high-tech and are poised to transform the package-delivery business. The unmanned aerial vehicles are “being put to work in commercial and civil government applications from firefighting to farming,” according to Goldman Sachs. “That’s creating a market opportunity that’s too large to ignore.” The global drone market will reach more than $41 billion by 2026, says a report from Drone Industry Insights. The report forecasts 1.4 million drones sold in that year, up from 828,000 this year, with the highest adoption of drones coming from the energy industry. Other industries include cargo, courier services, logistics and warehousing, Drone Industry Insights says. Increasing use of combat drones is part of the reason Brandessence Market Research & Consulting expects North America to dominate the drone market from 2021 to 2027. Here are seven drone stocks to watch in 2022.
Drone Delivery Canada Corp. (ticker: TAKOF)
This drone company offers software, hardware and services for cargo delivery. As an early-stage company, Drone Delivery Canada could be a risky prospect, but its software-as-a-service business model that includes both software and hardware seems promising. Its long-distance, heavy-lift Condor drone as well as its next-generation Sparrow drone are in testing and expected to be commercially available in 2022. Like many fledgling companies, Drone Delivery Canada is in spending mode to expand its technology and services, but it has also been whittling away at its net quarterly losses. “Through their drone-based logistics systems, Drone Delivery Canada is offering a cost-effective way to deliver cargo by reducing shipping time and reducing costs,” according to technical trading analysis firm Elliott Wave Forecast.
Kratos Defense & Security Solutions Inc. (KTOS)
This company develops unmanned systems and other technologies for U.S. national security-related customers and allies as well as commercial enterprises. Although the company reported a loss in its quarterly statement in November, its unmanned systems segment revenue grew 14.6%, to $61.3 million. Still, the segment’s earnings decreased as the company boosted lower-margin development programs, including one for tactical drones. Eric DeMarco, the company’s CEO, said in a statement accompanying the results that the 2022 U.S. Defense Department budget will be favorable for the company, which has a number of programs moving from development to production. “Though we expect COVID-related, supply chain and customer issues the industry and Kratos are experiencing to continue, there is no change in Kratos’ expected up-and-to-the-right, long-term organic growth profile with increasing profit margins,” DeMarco says.
AeroVironment Inc. (AVAV)
Another defense contractor in the drone space that investors should pay attention to in 2022 is AeroVironment, which offers unmanned aircraft systems and services to the U.S. Department of Defense and international allied governments, as well as tactical missile systems and services to the U.S. government. Earlier this month, the company said it had received a contract worth more than $4.1 million to supply small unmanned aircraft systems, initial spares packages, training and support to an allied nation in September 2022. Its quarterly report in September showed that the company swung to a loss despite increasing its revenue 16%. It is expecting net income of $29 million to $34 million on revenue of $560 million to $580 million in 2022.
Boeing Co. (BA)
Although drones make up a relatively small segment of Boeing’s revenue, it seems as if those sales could grow along with military and civilian demand for drones. Boeing’s defense division has a dedicated drone subsidiary called Insitu that designs, develops, produces and operates unmanned aircraft systems. In addition to defense applications, the company’s technology is used in environmental monitoring, agriculture, search and rescue, disaster relief and mining operations. In October, the company said it was partnering with a Norwegian company to optimize Insitu’s Integrator unmanned aircraft system for flight in the Arctic and other high-latitude climates with the aim of creating “the first tactical UAS capable of operating routinely in known icing conditions.”
Draganfly Inc. (DPRO)
In addition to the military, this drone developer and operator serves the public safety, mining, oil and gas, agriculture and insurance industries. That last one offers an interesting example of how drones are reshaping the business world. Insurance companies can use Draganfly technology for pre- and post-damage inspections. In November, the company reported record third-quarter revenue of nearly $1.9 million, an increase of more than 30%. Most of that was from product sales, with the rest coming from drone and engineering services. In October, the company signed a manufacturing agreement for at least $9 million to design and develop a consumer drone for video game and personal robot company Digital Dream Labs, which will order at least 50,000 units per year with delivery starting in 2022.
UAV Corp. (UMAV)
Drones are often fixed-wing or multirotor aircraft, but UAV Corp. is part of a group developing dirigible technology. In October, the company announced it had successfully flown a prototype airship and was ready to manufacture it with its business partners and support from the U.S. Air Force. It says the technology can be developed to reach 100,000 feet, and the company aims to add high-altitude human flights to its business model. It should be noted that penny stocks like UAV Corp. can be risky bets. But at just a few cents per share, the stock could produce above-average returns if its business plan gets off the ground.
AgEagle Aerial Systems Inc. (UAVS)
This drone company has been bulking up its revenue with acquisitions, with its purchase of mapping-drone company senseFly from Parrot SA (PAOTF) marking its third buy this year. During the third quarter, total sales rose 169% to just over $2 million on new revenue generated from sales of the company’s sensor and software solutions. Still, AgEagle’s third-quarter net loss widened year over year. AgEagle scored a win during the quarter when the Florida Department of Agriculture and Consumer Services expanded its license of the company’s HempOverview software-as-a-service platform aimed at the government-regulated hemp cultivation industry. In addition to the agriculture industry, the company also serves energy, construction and government customers.
Best drone stocks to watch in 2022:
Drone Delivery Canada Corp. (ticker: TAKOF)
Kratos Defense & Security Solutions Inc. (KTOS)
AeroVironment Inc. (AVAV)
Boeing Co. (BA)
Draganfly Inc. (DPRO)
UAV Corp. (UMAV)
AgEagle Aerial Systems Inc. (UAVS)
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7 Drone Stocks to Watch for 2022 originally appeared on usnews.com
