Stone Fox Capital
Founder, CIO & Portfolio Manager of Stone Fox Capital
Ondas stock won't rally until it can grow without buying more companies. Its GATE Technologies and Bron Technologies deal, $205 million plus up to $185 million in performance-based consideration, seems too good to be true: GATE is expected to grow revenue from $65 million in 2026 to $180 million in 2028 with strong margins and contribute over $130 million of adjusted EBITDA through 2028. x.comÂ
Ondas's share-funded acquisitions look very risky without a strong core business to make them work. It has raised $1.8B selling shares, yet roughly $1.4B sits in cash and short-term investments. One customer provides 55% of revenue, and $252M plus $742M in stock spent on acquisitions has not produced big revenue; continued raises and management pay add to the concern. x.comÂ
Ondas Holdings' acquisition strategy risks diluting shareholders if revenue cannot catch up with share issuance over a modest period. The model can work if it does; otherwise value gets diluted away. Fair value looks like $3-5. x.comÂ
Ondas could have serious upside over the next few years if it delivers anywhere close to the 30%-40% portfolio growth its CEO Eric Brock expects. At current levels, the stock is starting to look compelling. x.comÂ
Ondas is still a bit early to buy because its story now depends on execution rather than demand, while acquisitions weigh on the shares. Full-year revenue guidance of $525M-$550M implies $390M-$415M in the second half, and the pipeline grew from about $4B to over $11B on European and Asia-Pacific defense deals, but a pipeline only matters once it becomes contracts and deliveries. Q2 carried integration costs and stock compensation; management should pause deals to integrate what it has bought. … Show more
Ondas has no revenue of its own outside acquired companies, and further buyouts will dilute shareholders. Its 44% short float signals that the market has little faith in it. Shares are headed below $5 and back to penny-stock status before the company performs in the long run. x.com x.com x.com x.com x.comÂ
Ondas' long-term opportunity extends beyond drones into growing counter-drone and unmanned ground vehicle markets. Broad industry estimates for these markets rise from $90.6B in 2025 to $210B by 2033, with counter-drone systems the fastest-growing segment at 26.8% annually. That total is neither Ondas revenue nor its own addressable market and may include overlap. Bullish on the company's future, but execution must earn conviction. x.com x.comÂ
Ondas's growth without margin discipline is a warning because it is so far from profitable: its EBITDA loss widened from $10.9M to $50.6M in one quarter. Revenue, orders and defense contracts are real, and guidance rose by $160M, yet the stock fell 8%. x.comÂ
Ondas's stock may run in place for a while because its accretive acquisitions keep being used to justify more dilution. Acquisitions may add to revenue, and Ondas could become a powerhouse eventually, but continued dilution offsets the gains. x.comÂ
Ondas looks like one of the best risk/reward small-to-mid-cap opportunities after a 60% pullback reset its valuation to under 3 times next-twelve-month EV/revenue. Acquisitions brought dilution but made it stronger, more diversified and added revenue. The five-year model targets $2.4B of revenue in 2030 at 16% net margins, implying $26-30 a share, about 350% upside. The stock is bouncing off the 0.618 Fibonacci level from its 2025 lows, and positive EBITDA within 12 months is the hope. x.comÂ
Ondas stock is being suppressed by constant dilution, an acquisition spree and a warrant overhang. It should not break out until the warrant overhang clears; a dip into the mid-$8s could make it worth revisiting. x.comÂ
