That announcement breathed life into the bull thesis that AgEagle is a potential major player in the drone economy. UAVS stock took off like a rocket ship. It hasn’t looked back since.
Shares are now up 500% year-to-date.
A little digging strongly suggests that this unnamed major e-commerce company is Amazon (NASDAQ:AMZN). A little more digging reveals that the follow-on PO could be the beginning of a significant, multi-year partnership between the two companies wherein AgEagle becomes a major Amazon drone supplier.
Of course, if that happens, the 2020 breakout in UAVS stock will turn into something much bigger over the next few years. After all, AgEagle features a market cap of just $150 million today. The drone delivery market projects to measure $29 billion by 2027.
But, if it doesn’t happen, there isn’t much else to hang your hat on here. Without an Amazon deal, UAVS stock will plunge back to penny stock territory.
So… will an Amazon deal materialize?
I think so.
A Closer Look at UAVS Stock
AgEagle was founded in Kansas back in 2010 as an agriculture intelligence company.
The idea was pretty simple. Create durable and rugged drones with advanced sensors that fly around and capture granular aerial image data of crops and growing fields. Send those images back to an integrated software service to be analyzed. Produce a comprehensive crop report. Enable a new era of data-driven farming, wherein farmers increase yields and reduce costs.
Great business idea. But the addressable market was niche, and management didn’t execute very strongly in winning business.
So, new management came in, and the company pivoted.
Now, AgEagle is a drone company focused primarily on two end-markets: 1) leveraging its ag tech drone expertise to build delivery drones for logistics, and 2) leveraging its ag intelligence history to create a compliance software system for U.S. hemp cultivation.
All About Delivery
The latter business — hemp growing compliance software — won a big contract in November 2019 from the Florida Department of Agriculture and Consumer Service, which selected AgEagle to manage the online application submission and registration process for hemp growers in Florida in 2020, 2021 and 2022.
But that contract isn’t generating much revenue. Instead, all the revenue is coming from the delivery drone business.
Specifically, that business has now received two batches of POs from an unnamed major e-commerce company in late 2019 and early 2020. That unnamed e-commerce company accounted for 92% of sales in the first half of 2020. It is essentially the sole driving force behind AgEagle’s 175% revenue growth in 2019, and 516% revenue growth in the first half of 2020.
So, make no mistake, AgEagle has a lot of moving parts. Only one of those parts matters today. The drone delivery business.
More specifically, all that matters today for UAVS stock is if these drone delivery POs turning into something more.
The Amazon Rumors and UAVS Stock
A little digging reveals that the unnamed major e-commerce company AdEagle is working with is Amazon.
Around the same time that AgEagle reported the second batch of POs from its e-commerce partner, it was confirmed that Amazon will be building a 140,000 square foot warehouse in Wichita, a stone’s throw away from AgEagle’s Neodesha, Kan . headquarters. That same month, AgEagle said in an SEC filing that it would be relocating its headquarters and manufacturing operations to Wichita, too. The company has since done just that.
Further, also around the time of the POs announcement, a video was leaked online that began with an AgEagle x Amazon logo, implying a collaboration between the two companies. The video mostly involved AgEagle’s founder unloading an Amazon drone from its crate. It has since been removed.
AgEagle has also suddenly raised a bunch of capital over the past few months from institutional investors.
TITLE : UAVS BUY LIMIT ORDER
ASSETS : STOCK
SYMBOL : UAVS
ORDER TYPE : (EP1) MARKET ORDER (1/2) position size (partial low lot entry)
(EP2) BUY LIMIT ORDER (2/2) (Now enter rest of position)
TF : Daily
ENTRY PRICE 1: $2.10
ENTRY PRICE 2: $1.80
STOP LOSS : $1.10
TAKE PROFIT 1- $3.10
TAKE PROFIT 2- $3.80
TAKE PROFIT 3-$4.10
TAKE PROFIT 4-$4.80
STATUS : active
What did your investigation uncover? Hopefully you bought in. I live in Wichita.