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AeroVironment Inc. (AVAV $226.48)
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Kratos Defense & Security Solutions Inc. (KTOS $89.13)
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Draganfly Inc. - Common Shares (DPRO $9.25)
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Red Cat Holdings Inc. (RCAT $14.73)
Q: Hello, can you comment on these drone makers? I know DPRO is very small but is Canadian. Otherwise, between KTOS and AVAV, what would be your pick today and why? Thanks.
5i Research Answer:
DPRO is interesting, but its sales base is still quite low. It is a $320M company with strong forward sales growth estimates, but it is unprofitable, does not generate positive free cash flows, and momentum has been just OK. If looking for drone-specific exposure is the core criteria, we would choose AVAV due to its market leadership in tactical drones, but for a broader-based defense name that has drone exposure, we would prefer KTOS.