Mobilicom (ASX:MOB) is an Israeli end-to-end provider of cybersecurity and smart solutions for commercial drones, robotics and autonomous platforms.
Last week its share price spiked by almost 20%, (from 4.10c on Thursday close to 5.00c on Friday), despite the company having made no official announcements. So we thought we’d go straight to the source: its founder, Oren Elkayam, who marks the spike up to its increased engagement with the investor community. MOB was also mentioned as a customer of Maris-Tech in its $17.8 million IPO).
With a global customer base, Mobilicom says it is well positioned across the United States, Europe, and Israel, three of the largest drones and robotics ecosystems “in the world”. Elkayam expects the company to be worth “tens of billions of dollars” over the next five years.
“We managed to capture seven players that are valued at and are trading billions of dollars on a yearly basis,” he says. “These are giants that chose Mobilicom.”
Those companies include Teledyne Flir, Israel Aerospace Industries, and Airbus, as well as leaders in government, defense and homeland security such as Elibit Systems and Israel Aerospace Industries.
“We have seen the momentum of that and we have several revenues of growth vectors across hardware, software, and cyber that will inject the recurrent revenue models and will enable us to have different growth platforms going forward,” he said.
A $50 billion market
Elkayam says Mobilicom is the first, and potentially the only end-to-end provider of critical components to those that manufacture drones, acting as a one-stop-shop that enables companies to use its hardware components and its software & security solutions while building out their platforms.
The founder and CEO predicts that the drones and robotics market is expected to be worth more than $50 billion within the next five years across different services, solutions, and market verticals; while its immediate market – targeting small drones and robotics – is projected to be worth more than $18 billion by 2026. It plans to focus on capturing both the commercial and government markets until 2023-24.
Elkayam believes that while the government sector will be the leading market in terms of volume and revenue, commercial providers of drones and robotics will become the dominant market player due to the sheer volume of potential applications including mining, delivery services, security, inspections of utility lines and others.
What makes for a good drone stock?
As for what makes for a good drone stock, Elkayam says there are three major factors to consider:
The first, is that like any emerging market experiencing high growth like drones and robotics, Elkayam says investors must understand that it’s not a pump-and-dump situation, or something to jump into for just a moment.
“You have to work and invest in something that you believe in, and then work with it over time to enjoy the fruits of the rise,” he says.
“No one can really tell you if the jump in the hockey stick will happen, whether that’s in six, nine, or 12 months. So sticking to it for a longer time is important for those investors who should then identify the companies with several pillars – for example, very good technology – that sets them apart from others because competitors will come to every niche as the market is growing.
“But if you have foundations of technology, patents and capabilities, it’s important that no one can copy and paste what you’ve done.”
Second is identifying a company with a go-to-market strategy that you believe in and that you can see is working well.
“That’s another good sign of where to follow because in emerging markets, you might bet on a horse that will not do as well as you expected because it’s hard to understand who the front runner is,” says Elkayam.
“But if you identify who the bigger players are in this industry, and look at who they have chosen to work with, they have already signaled to you where they put their bets.
“It’s easier for you to do that, and understand what advantages they have over others that will enable them to flourish and ramp at a faster pace once the market will happen.”
The third thing is the importance of having a good team behind the stock. Investors should be looking to identify capabilities and ability to exercise them across different aspects of the company, not just in their technology but also in their business and manufacturing capabilities because once business begins to ramp up to address the needs of international markets, the ability to execute rapidly will be critical.
“We at Mobilicom have invested intensively in building those foundations,” Elkayam says. “We have focused all our energy crafting a strategy that is built on those foundations, and it’s working.”
Mobilicom share price today: