Agricultural industry technological solutions provider AgEagle Aerial Systems (NYSEAMERICAN:UAVS) is a company that designs and sells what’s known as unmanned aerial vehicles (UAVs), or drones. This is a niche market and because of that, UAVS stock might not immediately appeal to all investors.
Still, there’s an argument to be made that specializing isn’t such a bad thing for a business to do. AgEagle describes itself as an “Industry leading provider of advanced aerial imagery & data collection & analytics solutions for the U.S. hemp industry, precision farming and sustainable ag.”
What the company didn’t mention in this description is that it’s venturing into a different area. There’s the potential for a massive revenue stream if this foray works out as planned.
There’s some mystery surrounding the details, but that’s not necessarily a bad thing. It’s possible that AgEagle is finalizing a partnership with a well-known e-commerce company. If that’s the case, then the price action in UAVS stock could be explosive.
UAVS Stock at a Glance
One of the reasons that UAVS stock’s upside movement could be magnified is that it is a low-priced stock. Oftentimes, a cheap stock can literally double or triple in price in a matter of days. This is particularly true if there’s a positive news-based catalyst.
The UAVS stock price has remained under $4 for the entirely of 2020 so far. Yet, UAVS wasn’t always classified as a penny stock. Since the share price has been much higher than it is today, there’s the potential to recapture the stock’s previous high marks.
Moreover, UAVS has increased in value throughout much of 2020 in spite of the novel coronavirus. In fact, the share price has doubled since early June. Therefore, at least in the short term, it’s fair to say that the bulls are in control.
Financial data should be an important part of any informed investor’s repertoire of research. And when it comes to AgEagle’s recently released fiscal results, the numbers are exceptionally positive.
For the six months ending on June 30, revenues increased by a whopping 516% compared to the same six-month period of 2019. Furthermore, the gross profit margin on sales for that six-month period in 2020 was 54%. That’s a substantial improvement from the 20% reported during the comparable period of last year.
In addition, there was $12.9 million in cash on AgEagle’s balance sheet during the first six months of 2020, which is much better than the $718,000 from the first half of 2019. On top of all that, the company reported that it had absolutely no long-term debt.
Delivering a Potential Revenue Stream
It’s exciting to consider that AgEagle could soon be a famous name in the area of e-commerce logistics. This possibility was raised when the company announced “the expansion of scope for its contracted commercial drone work through the receipt of follow-on purchase orders from a major ecommerce company.”
Which major e-commerce company is this? We don’t have a definite answer to that yet. However, it could be a very familiar online commerce giant that specializes in fulfilling orders and getting packages to your door.
While AgEagle doesn’t exactly name the big-ticket client, it’s not difficult to connect the dots as clues are provided:
Representing significant new revenue, the new purchase orders relate to the continued manufacturing and assembly of drones used for the testing and refining of the client’s commercial drone small package delivery vehicles, systems and operations currently in development.
Suffice it to say that within the next year, there could be a big reveal. And if that happens, then there could be a fury of trading activity that pushes the UAVS stock price much higher.
The low price of UAVS stock means that it could potentially make an outsized move if there’s a major catalyst. Plus, that catalyst has already been teased by AgEagle.
This could all add up to explosive price action and serious returns for UAVS stock holders.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation.