Ondas Up Nearly 600% in the Past Six Months: How to Play the Stock?

Ondas Holdings Inc. (ONDS) has been one of the most eye-catching performers with dizzying gains of 597% in the past six months. The stock surged 15% yesterday, reaching a new 52-week high of $15.07 before closing at $14.01.

It has outperformed the Communication-Network software industry’s growth of 14.7%. The S&P 500 composite and the Zacks Computer and Technology sector have risen 13.2% and 18.1%, respectively, in the same time frame.

Price Performance

The pivot to the drone business has been instrumental in driving up the stock price. Ondas Autonomous Systems (“OAS”) division has emerged as the main catalyst, gaining primarily from the deliveries for both its Optimus System and Iron Drone Radar counter-UAS platforms, as well as contributions from Apeiro ground robots.

A rapidly expanding opportunity set encompassing counter-UAS demand, strategic partnerships (Rift Dynamics) and NDAA-compliant U.S. production readiness is likely to keep the engine humming for OAS. The company recently secured nearly $10 million in new purchase orders across its autonomous systems portfolio, solidifying its position as a rising player in integrated air and ground autonomy.

Ondas Holdings Inc. Price, Consensus and EPS Surprise

Ondas Holdings Inc. price-consensus-eps-surprise-chart | Ondas Holdings Inc. Quote

To complement organic expansion, ONDS has several buyouts that expand its reach into areas of unmanned ground systems, robotics and fiber optic communications, subsurface intelligence and demining robotics. A robust balance sheet will support expansion in the autonomous systems vertical and fuel M&A activity. The company has announced its investor day on Jan. 16 wherein it intends to discuss strategic priorities and financial outlook.

However, such an explosive rally is bound to raise an obvious question: Can the stock maintain the rally after a new 52-week high, or is it time to take profits?

Let’s examine closely.

ONDS Has Tailwinds but Now Faces Challenges

ONDS provides private wireless data solutions through its Ondas Networks division and autonomous drones via OAS. Though the pivot to autonomous systems catapulted shares to sky-high levels, the company is still in the early stages of commercialization.

Losses are substantial while expenses are increasing. In the third quarter of 2025, operating expenses increased to $18.1 million, up from $8.7 million in the prior-year quarter, mainly driven by higher personnel costs. As a result, adjusted EBITDA loss widened to $8.8 million compared with a loss of $7.1 million in the year-ago quarter. Compared with EBITDA and expenses, revenues came in at $10.1 million, almost entirely from the OAS division ($10 million).

ONDS is in the middle of a massive transition and already incurring sizable expenses. Management described a period of heavy infrastructure building and team expansion. These moves strengthen long-term competitive moat, but amplify short-term financial pressure.

Heavy dependence on the OAS division for revenue growth in the increasingly crowded drone space is a concern. For ONDS, if a single large customer delays, reduces or cancels, revenues would decline materially. For a stock that has already run more than 597%, even slight execution slips could result in significant volatility.

The drone industry is experiencing rapid growth, with the global drone technology market expected to grow at a CAGR of 14.3% from 2025 to 2030, according to a report from Grand View Research. Competition has intensified with drone companies such as Red Cat Holdings (RCAT), AeroVironment (AVAV) and Draganfly (DPRO) vying to capture a larger share.

For its Ondas Networks, the company expects “meaningful adoption” by the railroads in 2026 for dot16, but at present has “modest revenue expectations from Ondas Networks relative to the OAS business”.

Further, so many acquisitions in such a short period of time can create integration overload risk. Although these buyouts provide undeniable technological depth, investors must watch closely for an increase in expenses and execution risks.

ONDS Valuation Is Sky High

ONDS stock is trading at a substantial premium, with a forward 12-month price-to-sales ratio of 35.37X compared with the industry’s 2.29X. The premium valuation exposes investors to sharp volatility and heightens downside risk in the near to medium term.

How Do Rivals Stack up?

Against ONDS triple-digit gains, rivals like AVAV, DPRO and RCAT have registered increases of 45.2%, 141.1% and 74.4%, respectively.

In terms of the forward 12-month price/sales multiple for AVAV, DPRO and RCAT stand at 7.71X, 4.03X and 8.23X, respectively.

ONDS: Make an Exit

At present, ONDS carries a Zacks Rank #4 (Sell).

While ONDS has long-term catalysts, the current lofty valuation, execution pressures and ballooning expenses suggest investors may want to consider locking in profits and exiting. New investors should wait for a favorable entry point.

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

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

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