Ondas Inc. ONDS recently secured a multi-million-dollar tender from the Israeli Ministry of Defense (IMOD) to develop and produce next-generation tactical attack drones, further driving its expansion into advanced autonomous defense systems. The program will focus on developing low-cost, scalable tactical attack drones designed for rapid deployment across frontline combat units. The initiative reflects a broader shift in modern warfare toward autonomous systems that can be produced quickly and deployed at scale.
The award strengthens Ondas’ position in the tactical aerial attack and precision-strike market. The company is building an integrated autonomous defense platform spanning air defense and counter-UAS, aerial intelligence, aerial attack and unmanned ground systems. Ondas plans to deliver a broader operational capability including the aerial platform, autonomous functions, mission software, system integration, production readiness and operational support. Its AI-powered command and mission-management software is designed to connect these capabilities, allowing drones, sensors, robotic platforms and command systems to operate as part of a coordinated autonomous network.
Tactical drones are becoming increasingly important on the modern battlefield because they can provide frontline units with rapid, flexible and relatively affordable aerial capabilities. For Ondas, this creates an opportunity to address growing demand for autonomous systems that combine speed, affordability, precision and scalability. Ondas also sees similar opportunities in the United States and other allied markets as governments increasingly prioritize affordable autonomous defense technologies. In July, it expanded its defense portfolio with a $6.9 million order from Australia’s Department of Defense for its DTIM (Detect, Track, Identify, and Mitigate) Single-Operator Counter-sUAS Kits.
Are ONDS Rivals Catching Up in the Drone Race?
Kratos Defense KTOS is the primary unmanned aerial target drone system provider for the U.S. Air Force, Navy, Army and several allied defense agencies. Recently, it supported the Missile Defense Agency and the Japan Maritime Self-Defense Force during the Japan Flight Test Experiment-01, providing target vehicles that enabled Japan’s next-generation SPY-7 radar to successfully detect, track and simulate missile engagements. Kratos also won a U.S. Army DEVCOM C5ISR contract to develop an upgraded seeker for the Javelin missile system. The next-generation infrared seeker will replace aging components, enhance targeting and effectiveness, and extend the weapon’s capabilities for the next decade.
Red Cat Holdings RCAT is a direct competitor of Ondas in the drone market. RCAT reported strong second-quarter results, with revenue surging 527% to $20.2 million and gross margin improving to 16.1%. It advanced in the Drone Dominance program, expanded its air, land and maritime autonomy portfolio, acquired Quaze Technologies and strengthened its balance sheet with $325.6 million in cash. RCAT reaffirmed its $150–$180 million full-year revenue target. In July, RCAT’s Teal Drones won a $2.49 million U.S. Air Force contract to supply Black Widow drones, training, batteries and support for evaluation as a potential replacement for the Air Force’s current Teal 2 fleet.
ONDS’ Price Performance, Valuation and Estimates
Shares of ONDS have jumped 32.8 % in the past month compared with the Zacks Wireless-National industry’s rise of 7%.
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In terms of the forward 12-month Price/Sales ratio, ONDS is trading at 6.67, lower than the industry’s multiple of 8.13.
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For ONDS, earnings estimates for the current year have been revised significantly downward in 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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This article originally published on Zacks Investment Research (zacks.com).