Will ONDS' Lucrative Border-Defense Win Ignite Its Next Growth Engine?

Ondas Holdings Inc.’s ONDS win of a major government tender to deploy an autonomous border-protection system using thousands of drones positions the company for stronger growth, higher revenue visibility, and deeper government-sector traction. Its Ondas Autonomous Systems (OAS) division will serve as the prime contractor, with the program launching in January 2026 and expanding over the next two years.

The contract award followed a highly competitive tender process that involved detailed technical evaluations, architectural reviews, and real-world operational demonstrations. OAS emerged as the top performer among defense primes, showcasing the strength of its autonomous capabilities, integrated architecture, and operational skills. The main goal of the program is to deploy a next-generation autonomous drone system for continuous border protection in both fixed and mobile setups. It will provide 24/7 ISR, autonomous swarm operations, and quick detection and response to ground and aerial threats across complex, high-activity border zones, with all sensors and mission functions integrated under a centralized command and control system.

Successfully executing this program could lead to recurring contracts, not just from the same government but from Allied nations worldwide. This award also supports Ondas’ System-of-Systems strategy, which combines aerial, ground, and cyber capabilities into one unified framework. Using Airobotics’ autonomous drones, Iron Drone’s interception systems, and Sentrycs’ cyber-over-RF takeover technology, OAS is delivering a fully integrated autonomous defense solution against both air and ground threats. As the program launches in 2026 and expands over the next two years, Ondas is positioned not only to boost its commercial momentum but also to strengthen its edge in autonomous defense ecosystems.

Ondas now expects at least $36 million in 2025 revenues, up from the prior $25 million, driven by strong OAS performance, acquisitions, and a $23.3 million backlog. Networks’ revenues remain soft due to slower rail deployments, but backlog momentum is improving. For 2026, it targets at least $110 million in revenues, with quarterly results dependent on order timing and rail-network buildout. However, macro woes and intensifying competition pose risks. Ondas faces mounting pressure from rival drone makers like Draganfly Inc. DPRO and Red Cat Holdings, Inc. RCAT, which could challenge its growth and market share.

How Does ONDS’ Industry Adversaries Stack Up?

Draganfly develops advanced drones, software, and AI tools that enhance operational efficiency for its clients. Like ONDS, it continues to secure strategic deals to expand its capabilities. Most recently, it received a significant international military order for its Commander 3XL drones through a major defense contractor, boosting the platform’s credibility as a dependable multi-mission system. The order also moves Draganfly into the first phase of a military evaluation program for broader deployment. Additionally, the company was selected by the U.S. Army to provide Flex FPV drones, and its Commander 3XL platform was chosen by a major DoD branch for advanced mission use.

Red Cat Holdings is a U.S. developer of advanced drones and robotic systems for defense and public safety. Through Teal Drones and FlightWave, it delivers American-made air, land, and sea solutions, anchored by its Black Widow sUAS family. The company is also expanding into uncrewed surface vessels via Blue Ops to support multi-domain missions. Its revenue pipeline continues to grow, driven largely by the expansion of the U.S. Army’s SRR Tranche 2 program, now valued at around $35 million after its July 2025 award. Red Cat has raised its 2025 revenue guidance to $34.5–$37.5 million and ended the third quarter with strong liquidity to support manufacturing scale-up, acquisitions, and international expansion.

ONDS’ Price Performance, Valuation and Estimates

Shares of ONDS have surged 1043.2% in the past year against the Communication - Network Software industry’s decline of 8.7%.

In terms of the forward 12-month Price/Sales ratio, ONDS is trading at 30.09, considerably higher than the Communication - Network Software industry’s multiple of 2.09.

The Zacks Consensus Estimate for ONDS’ earnings for the current year has been significantly revised north over the past 60 days.

ONDS currently has a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research