Ondas Inc. (NASDAQ:ONDS) shares experienced a notable decline last week, closing at $6.53 on Friday, down 10.1% from the prior week. The drop comes as investors scrutinize the upcoming delivery of approximately 45 million DZYNE shares scheduled for January 4, which will increase the company's outstanding shares by 7.9%.
The DZYNE share distribution is a key component of the company's acquisition strategy. At Friday's closing price, the DZYNE shares are valued at roughly $294 million. Including these shares, Ondas' pro forma equity value would rise to $4.01 billion from $3.72 billion, based on the current share price.
This adjustment alters the valuation denominator. Using management's 2026 minimum revenue target of $525 million, the equity value-to-sales multiple increases to 7.6 times from 7.1 times on a current issued basis. The table below illustrates the impact:
- DZYNE shares shown: 40.00 million currently, rising to 85.00 million after delivery.
- Total shares outstanding: 569.84 million currently, rising to 614.84 million.
- Equity value at $6.53: $3.72 billion currently, rising to $4.01 billion.
- Equity value divided by $525 million revenue floor: 7.1 times currently, rising to 7.6 times.
It is important to note that these are initial estimates by reporters, using a fixed share price of $6.53. Options, restricted stock, warrants, and prospective acquisition payouts are not included. The figure reported is equity value, not enterprise value.
Revenue projections account for both DZYNE and Omnisys. The DZYNE equity payment is split into two parts: Ondas finalized the issuance of 39,999,998 shares at closing, and the January block adds another 44,999,998 shares, bringing the total DZYNE equity consideration to approximately 85 million shares.
Market context reveals that Ondas' decline outpaced its peers. The Nasdaq Composite dropped 2.9% over the past week, while key defense peers showed greater stability: AeroVironment Inc. (NASDAQ:AVAV) fell 1.6%, and Kratos Defense & Security Solutions Inc. (NASDAQ:KTOS) slipped 4.5%. Ondas trailed both.
Trading volume on Friday was 214.5 million shares, representing 2.8 times the 65-day average. The agreement limits sellers to pro-rata sales of up to 10% of each day's volume, though the registration filing does not disclose which sellers made sales.
Ondas forecasts that DZYNE will achieve $191 million in revenue in 2026, with expectations to exceed $300 million in 2027 and reach positive EBITDA. "The character of warfare is changing rapidly," Chief Executive Eric Brock stated in a filing with the Securities and Exchange Commission.
The company raised its 2026 revenue target to a minimum of $525 million following the acquisition, factoring in Omnisys but not Cyberhawk, which Ondas anticipates completing in the third quarter. First-quarter revenue reached $50.1 million, while the operating loss totaled $42.7 million and adjusted EBITDA loss stood at $10.9 million.
Ondas recorded over $150 million in orders and awards for the second quarter by June 22, though these represent orders, not revenue. The timing of conversion remains a key factor for valuation. Risks include potential delays in integrating systems, which could push back revenue and margin objectives, and the issuance of registered shares in January, which may increase share supply. As of June 30, short interest was 37.8% of float, which could intensify price swings.
