Home Stock list Why the stock of AgEagle aerial systems is exhausted today

Why the stock of AgEagle aerial systems is exhausted today


What happened

Actions of AgEagle aerial systems (NYSEMKT: UAVS) jumped 27% on Friday morning after the drone maker said its subsidiary had been selected, along with other suppliers, to work with the Defense Ministry. There doesn’t appear to be any new income from breeding yet, but eventually it could open up new possibilities for the young company.

So what

It’s been a remarkable few years for AgEagle, which just over a year ago was a penny stock valued by the market at less than $ 10 million. Its market cap jumped to nearly $ 1 billion earlier this year on rumors AgEagle was working with Amazon on a retail delivery drone.

Image source: Getty Images.

Those hopes have largely cooled, but AgEagle continues to look for ways to branch out instead of just supplying drones that help farmers manage their crops and monitor fields for drug agencies. On Friday, AgEagle said its subsidiary SenseFly was named on a list released by the Pentagon’s Defense Innovation Unit (DIU) earlier this month.

SenseFly, along with 10 other companies, will work with the DIU to set standards and prototype new approval processes for small drones. As part of the process, SenseFly performed two demonstrations for U.S. government officials.

The SenseFly eBee TAC drone used in the demonstrations weighs just 3.5 pounds and is hand-launched, and offers the ability to quickly map an area. AgEagle said SenseFly was selected from a pool of more than 100 potential applicants for the program.

“Thanks to senseFly’s innovative eBee TAC, AgEagle believes that our company can become an important player in the [unmanned aircraft system] national industrial base for the United States and its allies, helping to ensure the delivery of secure drone mapping and reconnaissance solutions upon which the DoD and other government entities will depend, ”said AgEagle CEO Brandon Torres- Declet, in a statement.

Now what

Selection is a positive development, but investors seem to be getting ahead. At best, the SenseFly selection opens the door to new business potential, and arguably, much of the new business SenseFly is able to attract from the government is already included in the price.

UAVS card

UAVS data by YCharts.

Although AgEagle shares are far from their peaks, it is still a company valued by the market at over $ 200 million, although it only generated $ 1.94 million in revenues during the last quarter. Until AgEagle is able to translate this potential into real results, I would advise investors not to get too carried away by the excitement.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.


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