TenQ

The Ondas story

Ondas builds autonomous defense systems and private wireless networks, with the central question whether its expanding portfolio can turn Army orders and drone deployments into profitable operations.

Ondas stock reportTenQ Score 14/36 · every chart and check from its filings
  • $6.04share price, last close
  • $3.4Bmarket value
  • 14/36TenQ Score checks passed

The story in brief

  • Growth extends beyond acquisitions. Revenue reached $83.8 million in the quarter to June 2026, with 85% growth from a year earlier on a pro forma basis assuming the same businesses were owned in both periods.
  • Army orders anchor expansion. Ondas had captured over $240 million of aggregate orders under the U.S. Army's $982 million Lethal Unmanned Strike award by its August 2026 earnings release.
  • Losses widened with scale. Adjusted EBITDA loss increased to $50.6 million in the quarter to June 2026 from $10.9 million in the quarter to March 2026 as spending on the operating platform expanded.

What drives the business

  • Ondas is assembling an integrated defense and infrastructure business through acquisitions, combining autonomous aircraft, counter-drone systems, ground robotics, sensing and software rather than offering only standalone hardware.
  • Ondas Autonomous Systems includes Optimus automated drones and Iron Drone Raider interceptors, Ondas Networks supplies FullMAX private wireless technology with a focus on North American freight rail, and Ondas Capital supports technology investments and partnerships.
  • Through Mistral, Ondas participates in the U.S. Army's $982 million Lethal Unmanned Strike indefinite-delivery, indefinite-quantity award, with a $52.9 million order captured in July 2026 and over $240 million in aggregate orders, distinct from the award's full capacity.
  • DZYNE and Cyberhawk, acquired in July 2026 and August 2026, expanded long-range surveillance, precision strike and infrastructure inspection capabilities, bringing customer relationships including the U.S. Air Force, U.S. Army, PG&E and Shell.
  • New orders of $175 million in the quarter to June 2026 supported reported backlog of approximately $613 million as of June 30, 2026, while pro forma backlog including DZYNE and Cyberhawk was $757 million.

What the price assumes

At $7.05 per share and a $4.1 billion market value, the reverse DCF cannot measure an implied growth rate because free cash flow and operating earnings are both negative, leaving the price dependent on future profits.

The valuation is 23.6x revenue against $174 million of revenue over the last twelve months and 979.3% revenue growth, but that expansion has not yet produced positive free cash flow.

TenQ's cash yield check requires free cash flow yield above 3%, compared with -4.2%, and its growth-versus-price check cannot establish support from a profitable operating base.

What could change the story

  • Integration must translate into lower costs relative to revenue: adjusted cash operating expense rose to $93.3 million in the quarter to June 2026 from $36.9 million in the quarter to March 2026, while adjusted gross margin declined to 50.4% from 51.5%.
  • Reported net earnings can obscure operating performance because warrant remeasurement creates noncash gains and losses, while the operating margin over the last twelve months was -140.4% and free cash flow was -$172 million.
  • The $1.4 billion in cash, cash equivalents, restricted cash and short-term investments at June 30, 2026 preceded approximately $325 million of cash used to close DZYNE and Cyberhawk during the third quarter of 2026.
  • The September 2026 GATE Technologies acquisition added $205 million of consideration, mostly payable in cash, plus a working capital adjustment and up to $185 million in performance-based consideration, increasing the funding and integration demands of expansion.
  • Stock-based pay of $101 million over the last twelve months adds an equity cost, while uneven order timing and changing product mix can make revenue and margins fluctuate.

What to watch next

  • Management's August 2026 outlook calls for revenue of $140 million to $155 million in the third quarter of 2026 and $525 million to $550 million for full-year 2026.
  • The next releases will test whether Army Lethal Unmanned Strike shipments, ULTRA and IonStrike deliveries, and planned fourth-quarter volume deliveries under the $140 million combat engineering vehicles program convert backlog into revenue.
  • Management expects adjusted EBITDA losses to decline sequentially in the third quarter of 2026, with operating platform adjusted EBITDA profitability by the fourth quarter of 2026 and company-wide profitability on that measure by the fourth quarter of 2027.
  • Pro forma organic growth, adjusted cash operating expense, free cash flow and cash remaining after acquisitions will distinguish operating progress from expansion through acquisitions.

Sources

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