Anduril is a great AI company, but it probably makes for a poor IPO.
Once upon a time, a unicorn company owns it personally, and although valued at over $1 billion, it was a rare variety. It appears that there are entire flocks of them these days.
Consider, for example, Andrill. A private artificial intelligence and defense company founded by Oculus VR Inventor Palmer Luckey first magically made its private market value of $1 billion in 2019. But Anduril didn’t stop there. Civil trade defense stocks have grown steadily over the past six months, last week It was raised According to a Bloomberg report, the company is valued at $2.5 billion in new cash and the overall company at $30.5 billion.
This is the growth rate investors want to gain. And although you can’t invest in Andrill stocks yet, you may be able to do it soon.
Because Andrill says he’s going to an IPO.
Image source: Getty Images.
Big news for Andrill
Andrill Chairman Trae Stevens told Bloomberg that his company is aiming to “expand it to the biggest issue for the national security community.” Particularly noteworthy, Andrill recently took over the huge $22 billion Pentagon Augmented Reality Agreement Microsoft. But Anduril said, “We need cash to get to the scale necessary to reinforce our balance sheet and ensure we have the capacity to deploy capital in these manufacturing and production problem sets we are working on.
Pre-IPO companies like Anduril have three ways to do that. They can get a loan (currently at high interest rates). Alternatively, you can hold an IPO and sell your shares in cash to public investors. or They can sell stocks individually by offering individual stocks. This final route was filmed by Andrill, but in an interview with Bloomberg, Stevens revealed that he has not ruled out the IPO.
“In the long run, we continue to believe Andrill is a publicly available form of a company,” Stevens said. “We’re not on the rapid path to doing that [but] We certainly have gone through the process necessary to prepare ourselves to do something like that in the medium term. ”
IPO time is ripe
However, Stevens and Lucky may want to shift that focus to the short term. It has only been a few weeks since Ukraine launched Operation Spiderweb. Over 100 artificial intelligence (AI) guided drones were guided from trucks to attack Russian airfields, dealing billions of dollars in damage without thousands of dollars in casualties, measured in thousands of dollars.
The memory of its mission had not faded before Israel launched its own surprise attack on Iran last week. While most headlines focus on the explosion of hundreds of Israeli fighter jets, in hundreds of fighter aircraft bombing Iran’s military and nuclear targets, Israeli Mossad spy engines also used drones and remotely controlled weapon systems to have a great effect.
These attacks were not merely reminiscent of Operation SpiderWeb. They were reminiscent of Andrill’s own artificial intelligence drone technology. With both successes renewed in the minds of investors, there may not be much time to launch an IPO to take advantage of this free promotion.
How to cherish Andrill
But let’s not be irrationally enthusiastic here. What’s good for Andrill isn’t necessarily good for investors. Popular stocks like Anduril, if it’s an IPOS, that doesn’t necessarily mean you need to buy it.
Think about what a $30.5 billion valuation of future public Andrill shares would mean.
According to Lucky, Andrill almost doubled its 2023 revenue in 2024, earning “about $1 billion” in 2024 sales. The company is not yet considered to be profitable, so it doesn’t make much sense in terms of P/E ratios. But that means Andrill sells at a price-to-sale ratio of about 30.5.
Compare it with an alternative to the “New Defence Technology” space. Aviation environment (NASDAQ: AVAV)until the time of Russia’s 2022 invasion of Ukraine, it was the largest name of US drone stocks, costing 7.4 times more sales. quarter Of Andrill’s rating. Aerobilon is a Profitability Defence stocks have made around $33 million last year.
Kalman Holdings (NYSE: KRMN)in itself, the recent defence stock IPO (which I claim to be) is approaching Andrill’s rating at 17.3x sales, but still only about half the price. Again, Kalman has already made a profit.
Don’t even ask about more traditional defense contractors General dynamics, Lockheed Martinor Northrop Grumman. Together, these three giants made more than $13 billion last year, but their P/S ratio ranges from just 1.6 (GD and Lockheed) to 1.9 times the sales. This is much cheaper than any of the new defense technology stocks that Anduril has included, and has a much longer track record of success.
Investor Results
I’m not here to knock Andril. As a company, I think it’s very wonderful and a great success story for American business. I hope Anduril will shake up the entrenched, overly concentrated defense industry, consisting essentially of companies like General D, Lockmart and Northrop, and help the Pentagon spend taxpayers’ defense dollars more wisely.
I don’t think I should invest in Andrill stocks. At least not today’s evaluation.
Rich Smith has no position in any of the stocks mentioned. Motley Fool has jobs at Aerovironment and Microsoft, and recommends. Motley Fool recommends Lockheed Martin and recommends the following options: A $395 phone at Microsoft for January 2026 length and a $405 phone to Microsoft for January 2026 short term. Motley Fools have a disclosure policy.
