Unusual Machines (UMAC +7.82%) stock jumped 13.1% through 3:30 p.m. ET Thursday after Needham analyst Austin Bohlig raised his price target on the drone stock by 36%, to $30 per share.
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Why Needham loves Unusual Machines
Demand for U.S.-produced drone components "continues to far exceed available supply," reports Needham -- and is still growing. As the only (that I know of) pure-play, publicly traded supplier of low-cost drone parts based in the United States, Unusual Machines is a likely primary beneficiary of U.S. legislation that, since December last year, has banned the import of critical drone components from foreign sources.
Needham forecasts that Unusual Machines may reach $100 million in annual revenue (as a run rate) by Q4 2026 -- up from barely $11 million last year.
NYSEMKT: UMAC
Key Data Points
How likely is this to happen?
Although this doesn't necessarily mean it's wrong, Needham's forecast appears to be an outlier. According to data from S&P Global Market Intelligence, most analysts following Unusual Machines forecast less than $38 million in revenue for the company this year, and barely $56 million next year (so much less than the $100 million "run rate" Needham says will be hit by the end of this year).
Worse, even after Unusual Machines passes $100 million in sales in 2028 (as most analysts project), this may not be enough to turn the company profitable. The consensus for 2028 is that $172 million in revenue will result in a $0.40 per-share loss for the defense stock. That's two more years Unusual Machines investors may have to wait for profits to appear. And if demand is as strong as the analyst expects, it's a virtual certainty new competitors will arise between now and then.
Unusual Machines stock may not be the slam dunk that Needham thinks it is.
