Ondas Inc ONDS recently secured a significant order of more than $50 million from the U.S. Army for tactical Lethal Unmanned Systems (“LUS”), reinforcing its growing presence in the defense market.
This order, awarded to Ondas’ subsidiary Mistral Inc., falls under a previously granted $982 million multi-year Indefinite Delivery, Indefinite Quantity (“IDIQ”) contract tied to the Army’s LUS program. Mistral's total awards, under the LUS program, to date have surpassed $240 million, including the initial $190.8 million award.
The contract underscores Ondas’ expanding role in the rapidly evolving precision-strike segment, which is witnessing strong global demand.
Strategically, the deal highlights the success of Ondas’ acquisition of Mistral, which has positioned it to compete more effectively for large-scale, multi-year government contracts.
Mistral is a prime contractor on U.S. Army and USSOCOM uncrewed and autonomous platforms procurement vehicles. It brings U.S.-based manufacturing, assembly, integration and quality assurance capabilities to Ondas’ operations, supporting program execution and compliance with the country’s defense sourcing requirements. Mistral has a wide-ranging exposure, including advanced mission equipment integration, survivability and mobility enhancements, unmanned systems procurement, defense electronics and lifecycle sustainment services.
Mistral is producing systems for the initial LUS order, with delivery beginning in the third quarter of 2026. The new order extends this production visibility.
Management continues to expect demand for precision-strike and loitering-munition capabilities to keep accelerating as U.S. and allied forces focus on autonomous and deployable strike capabilities.
However, the opportunity is unfolding in an increasingly crowded drone space. Given the rising adoption of autonomous and distributed warfare systems, several established and fast-upcoming players in the drone space are vying for a larger share of this lucrative market. The unmanned aerial vehicle drones market is expected to witness a CAGR of 9.3% from 2026 to 2031, according to a report from Mordor Intelligence.
Let's Evaluate the Competitive Terrain
Red Cat Holdings RCAT is one of the closest competitors for Ondas in the drone space. Teal Drones and FlightWave Aerospace are two of its wholly-owned affiliates. Its portfolio also includes Black Widow (small, unmanned aircraft systems), TRICHON (a military-grade hybrid VTOL) and FANG, an NDAA-compliant FPV drone.
It recently introduced Hellcat, a dual-use small unmanned aircraft system based on the Black Widow platform. RCAT’s expansion into USVs via Blue Ops adds a significant new revenue stream. It also completed the acquisition of Quaze Technologies Inc., which develops wireless power transfer technology for unmanned and autonomous systems. The company recently reported second quarter 2026 results. Revenues surged 527% year over year to $20.2 million.
The broader demand backdrop strongly supports sustained growth in Kratos Defense & Security Solutions KTOS drone business. Unlike ONDS, Kratos’ unmanned systems business involves scaled defense programs and vertical integration. At the heart of this business lies the XQ-58A Valkyrie combat collaborative aircraft (“CCA”), which has secured a key role in the U.S. defense ecosystem.
Additionally, the company is actively participating in multiple next-gen drone and CCA programs, with strong positioning in future procurement phases. Earlier in the year, Northrop Grumman, a KTOS partner, received the $230 million MUX TACAIR CCA program award, which will be split equally with Kratos. For this program, Northrop will equip its mission systems with Kratos Valkyrie CCA, validating Valkyrie’s operational relevance. The company is also expanding its presence in C-UAS, a category expected to ramp significantly over the next few years.
Second quarter revenues came in at $458.8 million, up 30.5%, with unmanned segment revenues increasing 8.1% year over year on an organic basis. Beyond drones, it is also expanding into other high-growth areas, such as hypersonics, propulsion systems, space and satellite systems, and microwave electronics
ONDS’ Price Performance, Valuation and Estimates
Shares of ONDS have gained 16.3% in the past month against the Wireless-National industry’s decline of 16.1%
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In terms of the forward 12-month price/sales ratio, ONDS is trading at 6.03, versus the industry’s multiple of 7.02.
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The Zacks Consensus Estimate for ONDS’ earnings for the current year has been revised downwards over the past 60 days.
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ONDS currently has 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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Red Cat Holdings, Inc. (RCAT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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