Draganfly (CNSX:DPRO): Reassessing Valuation After Short Interest Eases But Remains Elevated

Draganfly (CNSX:DPRO) just saw its short interest slide roughly 4%, even though about 9% of its float is still sold short, a mix that can quietly reset the risk reward profile.

See our latest analysis for Draganfly.

That shift in short interest is landing just as momentum in the share price has picked up, with the stock at about CA$11.12 after a strong year to date share price return but still weighed down by deeply negative multi year total shareholder returns.

If Draganfly's recent move has you rethinking your exposure to the sector, this could be a good moment to explore aerospace and defense stocks as potential alternatives or complements.

With revenue growing quickly, but losses still deep and the share price rebounding after years of heavy declines, investors now have to ask whether Draganfly is a genuine bargain or if the market is already pricing in a turnaround.

Price-to-Sales of 34.8x: Is it justified?

Draganfly's last close at CA$11.12 translates into a price-to-sales ratio of 34.8 times, pointing to a rich valuation versus peers and the wider aerospace and defense space.

The price-to-sales ratio compares the company’s market value to its trailing revenue, a useful yardstick when a business is still loss making but growing quickly.

In Draganfly’s case, the market is attaching a premium that assumes its rapid revenue expansion ultimately scales into a much larger, more profitable platform business than current financials suggest.

That optimism comes at a steep mark up, with the stock valued at around ten times the North American aerospace and defense average of 3.4 times sales and well above the estimated fair price-to-sales ratio of 6.2 times that our models indicate as a more sustainable level.

Explore the SWS fair ratio for Draganfly

Result: Price-to-Sales of 34.8x (OVERVALUED)

However, persistent heavy losses and a long history of weak shareholder returns still leave room for sentiment to reverse if execution disappoints.

Find out about the key risks to this Draganfly narrative.

Build Your Own Draganfly Narrative

If you see the story differently, or simply prefer to dig into the numbers yourself, you can build a tailored view 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.

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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.

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