Potential Double-Baggers in the Drone Boom, EV Upside and a Takeover Bet: What Volatus Aerospace, BYD and Delivery Hero Offer Investors

Volatus Aerospace: Potential Double-Bagger

At Volatus Aerospace, the vision and the figures are still somewhat at odds. Yet that is also part of the stock's appeal. The Canadian drone specialist aims to evolve from a service provider and retailer into a vertically integrated aerospace and defence group. In addition to inspection flights, pilot training and the sale of drones, the company's own autonomous systems, software and military reconnaissance services are set to drive growth in future.

The second quarter showed initial progress, but failed to meet market expectations. Turnover rose by 49.5% to CAD 8.42 million compared with the weak first quarter. Revenue from services rose by 59% and equipment deliveries by 38%. However, compared with the same quarter last year, turnover fell by just over 20%.

According to the company, the main reason was a defence contract worth around CAD 2.6 million, which could not be completed on time due to ongoing supply chain issues. The delivery is expected to be made up later in the year. Nevertheless, management has reduced its 2026 revenue target from CAD 56 million to CAD 50.6 million.

On the earnings front, too, Volatus is still some way off breaking even. Although gross profit reached CAD 2.47 million in the second quarter, the corresponding margin fell from 31.9% to 29.3%. Adjusted EBITDA was in the red at CAD 4.35 million. In the first half of the year, the net loss totalled CAD 14.09 million. Investments in staff, technology, defence and the new production site are currently driving costs up faster than revenues.

The balance sheet provides some relief. At the end of June, Volatus had cash and cash equivalents of CAD 59.2 million and working capital of CAD 63.8 million. This was made possible, among other things, by a CAD 34.5 million capital increase. This means that funding for the next phase of growth is secured for the time being.

At the heart of the strategy is the production and integration facility at Montreal-Mirabel Airport, which opened in June. There, Volatus intends to assemble autonomous aerial vehicles and defence systems, as well as equip various drone platforms with sensors and its own control technology. According to management, the site could one day generate revenue of up to CAD 250 million when operating at full capacity. While this is not an official revenue forecast, the projection, based on revenue to date, illustrates the scale at which Volatus aims to operate in the future.

In line with this, the company is expanding its own technology. The V-Cortex flight controller is designed to control various unmanned systems and enable increasingly autonomous operations. Furthermore, SKYDRA, a software platform for planning and simulating drone defence, has been launched. The subscription model could generate recurring revenue and higher margins.

In addition, there are several partnerships. Together with Kraus Hamdani Aerospace, Volatus intends to establish a Canadian platform for continuously available reconnaissance and surveillance missions. A further collaboration with Singular Aircraft focuses on autonomous heavy-lift aircraft for combating forest fires. There are also applications in infrastructure inspections, offshore wind farms and logistical tasks, as well as a multi-year training contract with the government of a NATO partner.

What will be crucial for the company's future operational performance is whether its numerous partnerships and pilot projects can translate into larger production orders in the foreseeable future. The stock market has already priced in a fair amount of optimism. At a share price of around CAD 0.49, Volatus has a market capitalization of approximately CAD 360 million. That is more than ten times its most recently reported annual revenue, meaning the stock is no longer trading at bargain levels.

On the other hand, Volatus is targeting several structural growth markets. Canada and other NATO countries aim to reduce their dependence on foreign suppliers in the areas of drones, reconnaissance and critical infrastructure. The production base is in place, the technology portfolio is growing, and there is sufficient liquidity. If the company successfully makes the transition from individual services and development projects to scalable production, the share has considerable potential. The five banks and analyst firms covering the share all recommend buying it. The average price target stands at CAD 0.95, which is 94% above the current price of CAD 0.49. Volatus Aerospace is therefore a potential doubler. However, due to the company's early stage of development, the stock remains speculative.

BYD: Exports as a Growth Driver

BYD is facing headwinds in its home market of China and is therefore stepping up a gear abroad. In the first half of the year, turnover fell by 7.1% to CNY 344.82 billion. Net profit declined by 20.5% to CNY 12.33 billion. The aggressive price war in China, weaker demand and currency losses took a significant toll.

The second quarter, however, suggests stabilization. Profit jumped by 30% year-on-year to CNY 8.25 billion, marking the first increase in five quarters. Although revenue still fell by 3.2% to CNY 194.59 billion, the quality of earnings improved. In the first half of the year, the gross margin rose from 18.0% to 18.9%.

The key driver is the international business. BYD exported around 792,000 vehicles in the first half of the year, just under 68% more than in the previous year. This means that overseas markets already accounted for around 44% of total sales. This expansion is bringing not only higher sales volumes but also better margins. With a growing presence in Europe, Latin America and Asia, BYD is reducing its dependence on the cut-throat price war in China.

The group continues to invest heavily in its technological position.
In the first half of the year, around CNY 28.9 billion was channelled into research and development, more than double what BYD earned during the same period. Operating cash flow nevertheless rose by 17.3% to CNY 37.34 billion.

Risks remain in the form of punitive tariffs, the costly establishment of its own production and sales structures, and resistance from Western auto manufacturers. Nevertheless, the BYD story is undergoing a fundamental shift. The Chinese high-volume manufacturer is transforming into a global automotive group. Should the second-quarter recovery continue and the higher-margin overseas business keep growing, the recent weakness in profits could already mark the low point. The share remains prone to volatility but offers an interesting counter-cyclical buying opportunity.

Delivery Hero: Raised Forecast and Takeover Premium

At Delivery Hero, an operational recovery is coinciding with tangible takeover speculation. Following a better-than-expected first half-year, the Berlin-based food delivery service has raised its forecast. Adjusted EBITDA rose by 3.9% to EUR 427 million. Analysts had expected only around EUR 396 million. Management now anticipates 9 to 11% growth in gross merchandise value in 2026, up from a previous forecast of 8 to 10%.

More important than pure growth is the development of profitability and cash flow. After years in which Delivery Hero bought market share with high marketing expenditure and aggressive discounts, capital discipline is now taking centre stage. Fewer price wars across several regions and better platform utilization are increasing operational leverage. Problems remain, particularly in South Korea and in parts of the Middle East and North Africa.

Adding to the excitement is the takeover bid from Uber, whose risk-reward profile is improving amid the operational upturn. Shareholders can tender their shares at EUR 41.50 in the coming weeks. At the current share price of around EUR 37, this represents a premium of just over 12%. The 50% threshold required as the minimum acceptance rate is likely to be reached without difficulty: Uber already holds 24.8% of the shares, while Prosus has committed to selling 16.7%. On top of this, there are derivatives representing a further 11.7%. However, payment is not expected until the second half of 2027 and is subject to competition authority approvals.

The improved figures, however, strengthen the Berlin-based company's negotiating position. Delivery Hero is no longer forced to sell due to operational weakness. At the same time, the takeover would allow Uber to significantly expand its international presence in the delivery business and achieve critical mass in numerous markets in one fell swoop.

The share therefore has two drivers: further earnings improvements through its own efforts and the prospect of a takeover premium. Should the talks fail, some of the optimism is likely to evaporate. However, given the raised forecast, the story is now more than just a pure takeover bet. For risk-tolerant investors with a long-term perspective, the share remains an attractive prospect nonetheless.

Conclusion: Three Shares, Three Risk Categories

Volatus Aerospace, BYD and Delivery Hero are each at a potential turning point. In the case of Volatus, it remains to be seen whether production capacities, technology and partnerships will actually translate into major contracts. Should a breakthrough be achieved, the share has considerable potential, though it remains the most speculative of the trio. BYD is operationally much more stable. Weak performance in China is weighing on the share price, but the export push is opening a new dimension of growth for the group. Delivery Hero, on the other hand, offers an attractive combination of improving earnings and takeover potential. This means there is something for different investor profiles: Volatus for risk-taking speculators, BYD for counter-cyclical investors, and Delivery Hero for long-term investors banking on an operational turnaround with the added prospect of a takeover.