Ondas Stock Up 51% in the Past 6 Months: Is There Further Upside?

Ondas Inc.’s ONDS shares have surged 51.4% over the past six months, in contrast to Wireless National’s industry's decline of 0.9%.

Price Performance

The company provides private wireless data solutions through its Ondas Networks division and autonomous drones via Ondas Autonomous Systems (“OAS”).

Ondas entered 2026 following a transformational year marked by a pivot to autonomous systems, aggressive portfolio expansion and platform scaling.

Ondas appears to be well-positioned to benefit from increasing demand for autonomous systems amid simmering geopolitical tensions. However, the company is still in the initial growth phase and faces plenty of challenges. This makes it important for investors to weigh both the opportunities and the risks when evaluating whether the stock has further upside.

Let’s delve deeper.

Expanding Opportunities in Autonomous Drone Systems

Ondas has been building a strong presence in the global drone market through its OAS unit. Increased deployments of Iron Drone Raider and Optimus autonomous platforms, along with new opportunities in the C-UAS segment and ground robotics offerings, particularly within the Unmanned Ground Vehicle portfolios, further strengthen Ondas’ long-term growth profile. 

Strategic partnerships (Rift Dynamics) and NDAA-compliant U.S. production readiness bode well for OAS. Management remains focused on driving OAS from a collection of specialized autonomous drone systems into a multi-domain global autonomy platform. 

Furthermore, geopolitical tensions are driving increased defense spending across many regions. ONDS recently announced that it secured multiple orders totaling nearly $6 million for the counter-drone systems (including Sentrycs cyber-RF counter-UAS) from existing defense and homeland security customers in the Middle East and other regions, amid the current regional conflict. 

To complement organic expansion, ONDS is focusing on M&A to strengthen the portfolio offerings and broaden its reach across multiple domains, including unmanned ground systems, robotics, fiber-optic communications, and subsurface intelligence and demining robotics. In the past year, it has acquired Sentrycs, Apeiro Motion and Zickel, among others. Recently, ONDS acquired Roboteam, which specializes in multi-mission tactical ground robotics.

At the Investor Day, ONDS noted that it had more than 20 acquisition targets in the active M&A pipeline, with at least seven in advanced stages. It recently announced an agreement to buy Rotron Aero, a UK-based developer of advanced UAS and long-range autonomous platforms.

ONDS recently announced updated preliminary financial results for 2025 and reiterated revenue targets for 2026. Fourth-quarter 2025 revenues are now expected to be between $29.1 million and $30.1 million, compared with the prior target of $27 million to $29 million. Full year, revenues are anticipated to be $49.7 million to $50.7 million, increased from the earlier targeted range of $47.6 million to $49.6 million. The company will report results on March 25. 

For 2026, Ondas has reiterated its revenue outlook (excluding any new acquisitions announced in 2026) to a range of $170-$180 million. 

ONDS’ pro forma cash balance exceeded $1.5 billion as of Dec. 31, 2025, adjusted for its earlier completed equity offering of approximately $1 billion, providing substantial financial flexibility for both organic and inorganic expansion.

Challenges That Could Limit Upside for ONDS

ONDS is in the middle of a massive transition and already incurring sizable expenses as it invests heavily in research and development and commercialization efforts. These moves strengthen long-term competitive moat, but amplify short-term financial pressure. The company expects the 2025 adjusted EBITDA loss to be between $32.4 million and $32.9 million. Net loss is projected to be between $52.8 million and $53.3 million. 

Rapid scaling of the OAS unit brings along execution and commercialization risks. Any delays in commercialization or challenges in scaling production could slow the company’s growth trajectory.  The drone industry is subject to intense regulatory processes. Changes in regulatory policies or delays in approvals could impact Ondas’ performance. 

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. 

The drone industry is experiencing rapid growth, with the unmanned aerial vehicle (“UAV”) drones market expected to witness a CAGR of 16.77% from 2026 to 2035, according to a report from Precedence Research. Competition has intensified with drone companies such as Red Cat Holdings RCAT, AeroVironment AVAV and Unusual Machines UMAC vying to capture a larger share.

Additionally, the ONDS 2026 revenue forecast assumes only a “modest contribution” from Ondas Networks as underscored during Investor Day.  

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’ Sky-High Valuation

ONDS stock is trading at a substantial premium, with a forward 12-month price-to-sales ratio of 19.71X compared with the industry’s 2.01X. The premium valuation exposes investors to sharp volatility and heightens downside risk in the near to medium term.

In comparison, the forward 12-month price/sales multiple for AVAV, UMAC and RCAT stand at 5.06X, 25.73X and 9.34X, respectively.

AVAV has registered a decline of 6.4% while UMAC and RCAT have registered gains of 63.2% and 28.1%, respectively, in the past six months.

ONDS: Hold for Now

ONDS offers compelling long-term potential as it expands the autonomous systems platform and strengthens its presence in the fast-growing drone market. 

However, its premium valuation, losses and risks tied to rapid scaling and acquisitions warrant a cautious approach in the near term. 

Given the balance of strong growth prospects and near-term challenges, investors may be better off holding the stock for now, while new investors need to wait for a favorable entry point. 

At present, ONDS carries a Zacks Rank #3 (Hold). 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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