Investing in small-cap stocks trading at a reasonable valuation and positioned for steady growth is a strategy that will help you deliver outsized gains over time. In this article, I have identified two such Canadian stocks you could consider buying with just $1,000. Let’s see why.
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Is this Canadian stock a good buy right now?
Valued at a market cap of $306 million, Volatus Aerospace (TSXV: FLT) provides integrated drone solutions across Canada, the U.S., the U.K., and Norway. It offers UAV (unmanned aerial vehicle) services, including pipeline monitoring, surveillance-as-a-service, wildfire management, geomatics (lidar surveys, photogrammetry), inspection services, and autonomous cargo delivery.
The company provides drone equipment sales, pilot training, and specialized software platforms for data analysis. Volatus serves oil & gas, utilities, construction, defence, mining, agriculture, and public safety industries with comprehensive aerial intelligence and logistics solutions.
Volatus Aerospace delivered mixed first-quarter (Q1) 2025 results, as revenue declined to $5.7 million from $6.6 million in the prior year, due to seasonal weather impacts and geopolitical uncertainties that delayed customer purchasing decisions.
Despite the revenue decline, its operating losses narrowed by 24% to $3.6 million while normalized EBITDA (earnings before interest, tax, depreciation, and amortization) improved 30% year over year.
In Q1, Volatus secured the Beyond Visual Line of Sight (BVLOS) approvals across Canada for daytime and nighttime operations. These approvals extend to complex airspace environments, including operations near vertical structures and in Canada’s remote northern regions. The regulatory milestone positions Volatus to commercialize its Operations Control Center (OCC) as a scalable service offering.
Volatus is pivoting its business model from capital-intensive operations to a customer-owned, company-operated approach. Under this structure, customers purchase drone equipment while Volatus provides managed services and recurring maintenance contracts, reducing the company’s capital requirements while generating steady revenue streams.
Its drone-in-a-box solutions, combined with OCC capabilities, enable fully automated remote operations with minimal ground personnel. These systems can operate across ranges of 20-60 kilometres from centralized hubs, supporting applications including infrastructure inspection, mining operations, and border surveillance.
Volatus maintains its commitment to achieving EBITDA breakeven by mid-2025, supported by improving operational efficiencies and an expanding pipeline of opportunities across critical infrastructure, mining, and public safety sectors.
Analysts tracking the Canadian stock expect revenue to rise from $27.15 million in 2024 to $101 million in 2028. Comparatively, it is forecast to report a free cash flow of $12.4 million in 2027, compared to an outflow of $13.8 million in 2024. FLT stock has more than tripled year to date but also trades 40% below all-time highs, allowing you to buy the dip.
Is this Canadian tech stock undervalued?
Another small-cap tech stock that operates in a similar vertical is Draganfly (CNSX: DPRO), which develops and manufactures unmanned aircraft and remote data collection systems in the U.S. and Canada. It offers quadcopters, fixed-wing aircraft, ground robots, and specialized software for tracking and data analysis. The company also operates health/telehealth platforms for remote biometric detection and provides sanitary spraying services, serving public safety, agriculture, industrial inspection, and mapping markets.
In Q1 of 2025, Draganfly reported revenue of $1.55 million, an increase of 16% year over year, driven by expanding partnerships and strategic positioning in the defence sector. It secured several notable partnerships, including an exclusive agreement with SafeLane, the world’s largest demining company, to provide aerial survey services for unexploded ordnance removal operations.
Draganfly strengthened its defence credentials by adding Chris Miller, former U.S. Acting Secretary of Defense, as a spokesperson and advisor, providing crucial access to military procurement channels.
Draganfly also opened a new Tampa facility with full testing capabilities, including live ordnance testing, positioned to serve special operations customers and manufacturing needs.
Management expects this to be a breakout year, with CEO Cameron Chell indicating the company needs approximately $35-40 million in revenue to achieve profitability. Analysts tracking the tech stock forecast sales to rise from $6.56 million in 2024 to $21.5 million in 2026.
The sales pipeline exceeds $100 million, with multiple large defence and public safety contracts under consideration that could accelerate growth trajectories.
