Deveron UAS (DVR.CN) specializes in yield optimization for agriculture through the use of drones to collect and analyze data.
Since our last article on the company, the following events have been reported.
July 4 - Enters partnership with FS PARTNERS, a division of GROWMARK Inc. an agriculture service provider in North America with more than 250,000 customers and $7 billion in annual sales across Ontario and 40 states in the USA.
July 20 - Commences pilot study with global crop protection company. Global leader in the crop protection industry using drones to support their production activities. The pilot will run through to the completion of the 2017 grow season.
Aug. 14 - Earning report for Q2 2017 - Net loss of 625K up from 265K YoY. Based on previous discussion with the company, a $3/acre figure is applied. Based on the earning results 26K acres (101 SQ KM) had been covered. Nonetheless, as of June 30, 2017, DVR.CN reported $1.0M in cash.
Aug. 25 - Expands drone data collection in Western and Atlantic Canada for leading Canadian agricultural producer. Reported commencing a trial program of drone-data collection for one of Canada’s largest and most progressive agricultural producers.
As displayed in the above charts, since the earning report for Q2 2017, the stock price has declined significantly. Considering potential weather, and logistical delays for the period, the earnings were "not bad". However, the market reaction suggests otherwise.
We still strongly believe that DVR.CN is a strategic asset with a high growth potential. To date, the company has been successful in signing large enterprise client and evangelizing its first mover advantage. However, because of confidentially issues, DVR.CN has been limited in what it can communicate to the market (client name and/or contract value) as it is in the midst of proving its technology with potential competitors.
As a result, the company has been short on details for earning expectations but now it seems that the market expects it.
Hence, DVR.CN will need to provide guidance to gain further valuation. As such, the company will need to evolve its narrative from "first-mover advantage" to "profitable with a first mover advantage". Profitability counts, even with the TSX Venture.
The current stock price represent a potential opportunity. Weekly forecast indicates that accumulation below $0.21 is optimal.
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