Shares of drone safety technology company ParaZero Technologies (NASDAQ:PRZO) are skyrocketing over 60% in Monday’s pre-market trading after a major regulatory approval for drones in Australia. This approval directly benefits ParaZero’s business and represents a major step forward for commercial drone operations globally.
On Friday, ParaZero’s partner company OVRL announced it had received approval from Australia’s Civil Aviation Safety Authority (CASA) to conduct commercial drone flights using ParaZero’s safety systems. This makes OVRL the first company ever to receive this type of approval in Australia.
The approval allows OVRL to operate drone delivery and other commercial drone services across Australia. All of OVRL’s drones utilize ParaZero’s SafeAir intelligent parachute systems, which can safely land a drone in case of mechanical failure or other issues.
Australia has highly stringent regulations regarding commercial drone use. Receiving CASA approval is a major hurdle that will allow greatly expanded business opportunities for ParaZero and its partners in the country.
Investors are cheering this positive regulatory development, with PRZO stock up 62% in Monday’s pre-market trading. The stock had already jumped 79% on Friday on the initial news of the Australian approval.
The recent rally comes after a brutal year for ParaZero’s stock price. Prior to Friday’s gain, PRZO shares were down 67.8% year-to-date in 2022 amid a challenging market environment.
Now it appears the company’s prospects are looking up thanks to the Australian milestone. In addition to the major stock move today, trading volume is already high with nearly 9 million shares changing hands prior to market open. That volume is about triple the stock’s daily average.
ParaZero is an Israeli tech company founded in 2014 that develops intelligent drone safety systems. The company’s flagship SafeAir product is an autonomous parachute that can safely land a drone in an emergency, preventing crashes.
The lightweight and compact SafeAir system is designed specifically for commercial delivery drones, providing an extra layer of safety for drone operators. It can be triggered automatically if the drone malfunctions or by a pilot remotely in dangerous situations.
The Australian approval paves the way for ParaZero to greatly expand use of its safety systems in a major global market. Commercial drone delivery is expected to grow rapidly in the coming years, presenting a sizable opportunity.
Prior to this, ParaZero’s technology was already in use by large customers including DHL and NASA. The company also has partnerships with major drone makers like DJI.
The recent rally shows investors are now recognizing the potential as regulatory hurdles fall in key markets like Australia. While Monday’s 60%+ pop is likely an overreaction, the long-term opportunity is real as ParaZero enables safer drone flight worldwide.
Investors will be watching closely in coming weeks to see if ParaZero can maintain the stock momentum. With the massive gain today, the stock has now recovered all of its losses from earlier this year.
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