Ondas Holdings' Counter-UAS Push: A Powerful Growth Catalyst?

Ondas Holdings Inc. ONDS is rapidly emerging as a formidable player in the fast-growing counter–unmanned aerial systems (C-UAS) market, positioning this segment as a central pillar of its long-term growth strategy. On its third-quarter 2025 earnings call, management underscored that rising global drone threats to borders, critical infrastructure and defense assets are driving an inflection point in demand for advanced detection and mitigation technologies.Ondas believes this counter-UAS boom is just beginning and that its platform is uniquely built to capture it.

At the core of this strategy is Ondas Autonomous Systems (OAS), which delivered record quarterly revenue of about $10 million and expanded its backlog to $22.2 million, or more than $40 million when including recently announced acquisitions. The company’s Iron Drone Raider system, an autonomous kinetic interceptor designed to defeat hostile drones, continues to gain traction across pilots and demonstrations in the United States, Europe and Asia, including high-profile showcases with international agencies. Management highlighted growing interest from defense, homeland security and critical infrastructure operators, especially in Europe, where geopolitical tensions are accelerating demand.

The company is pursuing acquisitions to advance its C-UAS efforts. Central to this strategy is Ondas’ definitive agreement to acquire Sentrycs, a leader in Cyber-over-RF technology. Unlike traditional jamming systems, Sentrycs’ solution can detect, identify, track and safely take control of hostile drones by interacting directly with their communication protocols, enabling precise mitigation without collateral interference. Deployed in more than 25 countries with more than 200 installations, Sentrycs brings a proven, high-margin software layer that complements Iron Drone’s hard-kill capability. Together, they form a layered detect-to-defeat architecture under a unified command-and-control framework, an offering Ondas believes is unmatched in the market.

Ondas has also bolstered its counter-UAS stack through the acquisition of Insight Intelligent Sensors, which adds electro-optical and AI-driven identification technology for small drones. This enhances early detection and target classification, improving the overall effectiveness of the Iron Drone–Sentrycs combination and reinforcing Ondas’ multi-domain, system-of-systems approach.

On the last earnings call, management highlighted that global demand for counter-drone technologies is expected to grow from approximately $2.4 billion in 2024 to more than $10.5 billion by 2030, reflecting a compound annual growth rate of 27%. This rapid expansion is being driven by the escalating threat of drones across defense, homeland security and critical infrastructure sectors, as well as by increasing government funding and regulatory support worldwide. Strong momentum is evident across all regions, underscoring the scale and urgency of the market opportunity.

Ondas 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. For 2026, it targets at least $110 million in revenues, with quarterly results dependent on order timing and rail-network buildout.

However, so many acquisitions in such a short period of time can create integration overload risk. Moreover, macro woes and intensifying competition pose further concerns.

Taking a Look at Initiatives of ONDS’ Competitors

Draganfly Inc. DPRO is a Canada-based developer of drone solutions and systems that is steadily strengthening its presence across defense, security and commercial markets. It has engaged in collaborative work on counter UAS threat detection and intervention by partnering with established counter UAS technology providers. Draganfly stated that Bluvec, a specialist in counter drone systems, selected Draganfly to co create solutions that enable specific military and civil UAS threat detection and intervention, integrating Bluvec’s counter UAS platform with Draganfly’s Commander 3XL UAV to extend detection and intervention range and add remote reconnaissance and patrol capabilities. Draganfly will act as a distributor and collaborator to expand the adoption of counter UAV infrastructure.

Red Cat Holdings, Inc. RCAT is a U.S. developer of advanced drones and robotic systems for defense and public safety. Red Cat has strengthened its defense drone portfolio through a series of strategic milestones, including partnerships with Hodgdon Shipbuilding to build uncrewed surface vessel prototypes, Apium Swarm Robotics to advance decentralized swarming capabilities, and AeroVironment to enable multi-domain drone deployment. The company also achieved Blue UAS certification for its FANG FPV drone, introduced the low-cost NDAA-compliant FANG F7 for tactical use and successfully tested Palantir’s VNav software on its Black Widow platform for GPS-denied operations. Further collaborations with Safe Pro Group added onboard AI threat detection, while NATO NSPA catalogue approval for the Black Widow system expands access to allied defense markets, underscoring Red Cat’s growing role in advanced defense and autonomous systems.

ONDS’ Price Performance, Valuation and Estimates

Shares of ONDS have surged 342.1% in the past year against the Communication - Network Software industry’s decline of 9.4%.

In terms of the forward 12-month Price/Sales ratio, ONDS is trading at 23.36, considerably higher than the Communication - Network Software industry’s multiple of 2.12.

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.

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

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