Ondas Inc. shares edged higher on Monday, rising approximately 3.9% to $9.69, despite the company filing a resale prospectus that could increase the stock's float. The stock traded in a range of $9.45 to $10.01, with volume near 39.7 million shares. The broader market also saw gains, with the Nasdaq climbing 3% and the S&P 500 adding about 1.9% amid improved sentiment.
Resale Filing Details
Ondas filed an 8-K with the SEC on Monday, registering the potential resale of 6,070,948 shares held by certain stockholders. Of these, 3,019,066 shares are tied to the acquisition of Omnisys Ltd., and 3,051,882 shares relate to the Indo Earth Moving Ltd. deal. The registration allows these holders to sell shares from time to time, but it does not guarantee a sale or that the company will receive any proceeds. This creates a potential overhang that could pressure the stock if holders decide to sell.
Focus on Orders and Backlog
Investors are now turning their attention to Ondas' second-quarter performance. The company reported that it secured over $30 million in new orders in May, bringing quarter-to-date orders to more than $110 million. CEO Eric Brock stated, "Securing over $30 million in new orders during May, and over $110 million in orders quarter-to-date, reflects Ondas’ continued execution." The company's pro forma backlog stands at $457 million, and the key question is whether these orders will convert into recognized revenue and cash flow.
Financial Performance and Outlook
In the first quarter, Ondas reported revenue of $50.1 million, more than ten times the year-ago figure, and raised its 2026 revenue target to at least $390 million. However, the company also reported an operating loss of $42.7 million and an adjusted EBITDA loss of $10.9 million. Adjusted EBITDA, a non-GAAP metric, excludes interest, taxes, depreciation, and amortization, and is used to track operating performance. Bulls point to the company's exposure to defense robotics, counter-drone technology, autonomous ground vehicles, and high-altitude platforms, which have seen increased demand. For instance, its World View arm secured a $4.8 million contract with the U.S. Navy SOUTHCOM for maritime domain awareness.
Risks and Challenges
Bears, however, focus on the company's elevated costs and losses. Ondas is still integrating recent acquisitions and managing higher operating expenses. Adjusted EBITDA losses are not expected to improve in the second quarter. Additionally, the resale registration could lead to dilution if holders sell their shares, adding downward pressure on the stock.
Market Position and Valuation
Ondas shares are considered risky at current levels, trading like a volatile, high-growth defense tech play rather than a value stock. The company reported $1.48 billion in cash, cash equivalents, restricted cash, and short-term investments as of March 31, providing some financial cushion. However, much of the optimism is already priced in, and investors are eager to see Ondas convert its strong order backlog into steady revenue and reduce its losses.
