ONDS Stock Slips 22% in the Past Month: What's Next for Investors?

After dazzling gains in 2025, Ondas Inc. ONDS has gotten off to a rough start in 2026. Shares have declined roughly 22% over the past month, while Wireless National’s industry has gained 8.7%. This sharp drawdown has understandably rattled investors.

Price Performance

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

However, ONDS is not alone in the downturn. Both the S&P 500 composite and the Zacks Computer and Technology sector have declined 3% and 0.9%, respectively, in the same time frame.

Such a sharp slump is bound to raise obvious questions. Is the pullback caused by deeper troubles in the business model?

Can the stock recover losses, or is it time to take profits and exit?

Let’s examine closely.

ONDS’ Long-Term Growth Compelling With Near-Term Pressure

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

A rapidly expanding opportunity set encompassing strategic partnerships (Rift Dynamics) and NDAA-compliant U.S. production readiness bodes well for OAS. 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.

At its Investor Day held recently, management was tremendously upbeat about its OAS unit and added that it has successfully launched and executed its core plus strategic growth plan and OAS is evolving from a collection of specialized autonomous drone systems into a multi-domain global autonomy platform.

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

Ondas Holdings Inc. Price, Consensus and EPS Surprise

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

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 announced preliminary financial results for 2025 and provided updated revenue targets for 2026. Fourth-quarter 2025 revenues are now expected to be between $27 million and $29 million, representing a 51% increase over its prior target. As of Dec. 31, 2025, backlog (preliminary estimates) was $65.3 million, up 180% from $23.3 million reported on Nov. 13.

ONDS’ pro forma cash balance exceeded $1.5 billion, adjusted for its recently completed equity offering of approximately $1 billion, providing substantial financial flexibility for both organic and inorganic expansion. A robust cash profile enables strategic M&A activity.

For 2026, Ondas has raised its revenue outlook to a range of $170-$180 million, representing a 25% increase over the previous target of $140 million, which included an estimated $30 million contribution from Roboteam. This upward revision underscores improved backlog and revenue visibility.

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However, this outlook assumes only a “modest contribution” from Ondas Networks. Solely relying on OAS, ONDS will have to navigate a multitude of challenges. Scaling the OAS business while dealing with integration risks amid an acquisition spree is likely to be tough amid intensifying competition from the likes of both established players like AeroVironment AVAV and upcoming players like Unusual Machines UMAC and Red Cat Holdings RCAT.

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.

ONDS Valuation Justified?

ONDS stock is trading at a substantial premium, with a forward 12-month price-to-sales ratio of 22.25X compared with the industry’s 1.88X. While the valuation appears stretched, it largely reflects Ondas’ early positioning in high-growth defense autonomy markets.

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How Do Rivals Stack up?

Rivals like AVAV and UMAC have registered a decline of 26% and 5.5%, respectively, while RCAT is up 14.8% in the past month.

In terms of the forward 12-month price/sales multiple for AVAV, UMAC and RCAT stand at 6.03X, 22.17X and 9.29X, respectively.

ONDS: Dip Represents a Buying Opportunity

At present, ONDS carries a Zacks Rank #2 (Buy).

Despite near-term volatility, Ondas’ recent pullback does not reflect weakening fundamentals. The company enters 2026 with strong momemtum driven by backlog growth which enhances revenue visibility and a solid balance sheet that supports M&A activity. For long-term investors with a tolerance for execution risk, the current dip offers an attractive 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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