ONDS Down 18.2% in the Past Month: Does the Pullback Create Value?

Ondas Inc.'s ONDS shares have fallen 18.2% in the past month even as its autonomous-systems business scales rapidly. The drop raises a straightforward question: Has the market created a better entry point, or is it discounting risks that still matter?

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Revenue growth, backlog and order activity remain powerful supports. Yet losses, heavy cash use and the challenge of integrating several acquisitions keep the risk-reward picture unsettled.

ONDS Growth Still Points Sharply Higher

Second-quarter 2026 revenues reached $83.8 million, up 67% sequentially and more than 13-fold year over year. Management raised its full-year 2026 revenue target to $525-$550 million from at least $525 million.

For the third quarter, revenues are projected at $140-$155 million. The midpoint implies roughly 76% sequential growth.

Ondas Backlog and Orders Support the Growth Case

Pro forma backlog stood at roughly $757 million as of June 30, including DZYNE and Cyberhawk. On the last earnings call, management noted that Ondas captured $175 million of new orders in the second quarter and another $105 million through the quarter-to-date period.

Its two-year strategic program pipeline exceeded $11 billion across aerial security, intelligence, surveillance and reconnaissance, precision strike and autonomous ground systems. That pipeline is not the same as contracted backlog, but it shows the scale of programs Ondas is pursuing.

ONDS Losses and Cash Burn Keep Pressure Elevated

The growth has come with a much larger cost base. Second-quarter operating expenses climbed to $199.1 million from $67.3 million in the first quarter, while adjusted EBITDA loss widened to $50.6 million from $10.9 million.

Net cash used in operating activities reached $137.4 million in the first half of 2026 versus $15.1 million a year earlier. Management expects adjusted EBITDA losses to improve sequentially in the third quarter, but consolidated profitability remains a future milestone.

Ondas M&A Raises Both Scale and Execution Risk

Ondas is integrating World View, Mistral, Omnisys, DZYNE and Cyberhawk while continuing work on earlier acquisitions. That broader platform adds capabilities across precision strike, counter-unmanned aircraft systems, intelligence and critical-infrastructure applications, but it also raises integration and delivery complexity.

AeroVironment, Inc. AVAV is a relevant comparison point because it also operates across autonomous systems, counter-unmanned aircraft technology, intelligence, surveillance and reconnaissance and precision-strike missions. Red Cat Holdings, Inc. RCAT likewise targets defense and security customers with small unmanned aircraft focused on intelligence, surveillance and reconnaissance and precision effects, underscoring the competitive intensity around military autonomy.

ONDS Signals Still Favor Caution After the Pullback

The pullback has not clearly turned ONDS into a bargain. The stock trades at 4.9X forward 12-month sales, only slightly below its five-year median of 5.1X and above the S&P 500's 4.8X multiple, while substantial operating losses and cash burn still need to improve.

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ONDS currently carries a Zacks Rank #4 (Sell). It also has a VGM Score of F, Value Score of F, Growth Score of F and Momentum Score of C. The Zacks Consensus Estimate for current fiscal-year EPS has deteriorated over the past four weeks.

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The Zacks Rank is designed around short-term earnings-estimate revisions, while the Style Scores are complementary indicators of value, growth and momentum characteristics. With a #4 rank and weak Style Scores, the current setup still favors caution rather than treating the decline alone as evidence of value.

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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