Ondas Shares Fall 0.96% as $730M Volume Ranks 166th Q3 Revenue Skyrockets 580% Amid Cost Surge

Market Snapshot

Ondas Holdings (ONDS) declined 0.96% on February 25, 2026, with a trading volume of $730 million, ranking it 166th in daily trading activity. Despite the recent price drop, the stock has shown significant volatility over the past year, surging 30.31% following Q3 2025 earnings due to a 580% year-over-year revenue increase. However, the company’s operating expenses nearly doubled to $18.1 million during the same period, highlighting ongoing cost pressures. The stock’s performance reflects a mix of optimism around its aggressive revenue targets and concerns about profitability amid rising expenditures.

Key Drivers

Ondas’s Q3 2025 revenue surge to $10.1 million, driven by expanded capabilities and strategic acquisitions in defense and security sectors, underscored its growth trajectory. The company raised its 2025 revenue target to at least $36 million and set an ambitious 2026 goal of $110 million, signaling confidence in its scaled operating platform. CEO Eric Brock emphasized a 50% gross margin target and an aggressive M&A strategy, which could accelerate market share gains. However, operating expenses ballooned to $18.1 million in Q3 2025, nearly double the prior year’s level, raising concerns about margin compression. Analysts note that while revenue growth is robust, the company’s path to EBITDA positivity by mid-2026 hinges on managing these costs effectively.

The company’s cash balance of $433 million as of September 30, 2025, provides a financial buffer for its expansion plans but also highlights the trade-off between reinvesting in growth and maintaining liquidity. Strategic acquisitions, while boosting revenue, require integration that could strain operational efficiency. Defense and security contracts, a key growth driver, come with risks tied to government budget cycles and evolving technology demands. Analysts have mixed views, with some upgrading price targets (e.g., Oppenheimer to $16, H.C. Wainwright to $25) based on long-term potential, while others caution about near-term profitability challenges.

Analyst ratings remain polarized, with a “Moderate Buy” average and a wide range of price targets from $5 to $25. Institutional investors have increased stakes in recent quarters, reflecting confidence in the company’s strategic direction, but insider sales of 1.4 million shares worth $12.1 million over three months suggest caution among executives. The stock’s beta of 2.46 and a price-to-earnings ratio of -26.08 further indicate high volatility and unprofitability, deterring risk-averse investors.

Key challenges include integrating recent acquisitions, mitigating risks from government contracts, and balancing R&D and SG&A expenses. While Ondas’s FullMAX broadband platform and heavy-lift drones position it for growth in mission-critical sectors, the path to consistent profitability remains uncertain. The company’s ability to execute its M&A strategy without overextending financially will be critical. Investors are monitoring upcoming EBITDA milestones and the integration of new capabilities into its operating model to assess whether the stock can sustain its recent momentum.