Adding to Ondas on Weakness as Pattern Signals 'Explosive Move'

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So much news.

On March 2, I covered "Sarge-folio" holding and core "Stocks Under $10" name Ondas Holdings (ONDS) . The stock was recovering at the time. I increased my price target price to $17 from $13.50. What could possibly go wrong?

As I write this piece, I see the last sale at $9.82, or down 17.5% in nine days from the $11.90 the shares were trading for when that article hit publication.

Monday

This past Monday, Ondas entered into a merger agreement with Mistral Inc. Mistral is headquartered in Bethesda, Maryland and operates a manufacturing, assembly, integration and infrastructure supporting rapid program. Mistral is a prime contractor for the U.S. Army and for SOCOM (Special Operations Command) in the uncrewed autonomous vehicle field.

This merger aligns with the ongoing Ondas corporate strategy to expand its footprint as a U.S. defense footprint. Ondas is looking to move from stand-alone systems deployment to participation in multi-year deployments of contracted vehicles.

In addition, Ondas reported preliminary Q4 revenue of $29.1 million to $30.1 million. Wall Street had been looking for something close to $27.5 million, so this was a positive.

That said, the company also guided fiscal year 2026 revenue towards $175 million to $180 million. At the midpoint, that was slightly below the $177 million or so that had been the consensus view. That forced a little bit of a selloff.

Ondas is expected to report in about two weeks.

Tuesday

Ondas announced that its 4M Defense unit had received an operational order worth roughly $15.8 million under a previously awarded multi-year demining program for the Israeli armed forces. This deal could expand to as much as $30 million in follow-up orders.

This unit provides autonomous systems support for border and national security operations using robotics, drones and advanced sensing technologies.

Wednesday

This morning, Ondas announced that it had acquired BIRD Aerosystems, a developer and provider of airborne missile protection systems as well as airborne surveillance and reconnaissance capabilities for military and homeland security purposes. BIRD was founded in Israel in 2001 and counts the U.S. Army, several NATO member nation forces, several APAC air forces and the United Nations among its clientele.

This acquisition expands Ondas' capacities as a player in the airborne and unmanned aerial systems and missile protection market. This should also bring new mission command-and-control technologies to the Ondas platform.

What Wall Street Thinks

This week:

-- Michael Latimore (four stars at TipRanks) of Northland Securities reiterated his "Buy" rating and his $16 price target.

-- Austin Bohlig (four stars at TipRanks) of Needham reiterated his "Buy" rating and his $17 price target.

- Amit Dayal (four stars at TipRanks) of HC Wainwright reiterated his "Buy" rating and his $25 target price.

- Jonathan Siegmann (four stars at TipRanks) of Stifel Nicolaus reiterated his "Buy" rating and his $18 target price.

- Max Michaelis (five stars at TipRanks) of Lake Street reiterated his "Buy" rating and his $19 target price.

My Opinion

This is the Andrews Pitchfork model, above, that I showed readers back on March 2. It's not too difficult to see that, as the stock has failed to take back its 50-day simple moving average (SMA) over the past couple of weeks, this model has failed.

Check this out though:

I now think I see a closing pennant that will likely lead to an explosive move. The pattern itself is non-directional in nature, it just tells you that a significant move is coming.

The above news tells me that Ondas is getting aggressive and that while they are spending money, there is undeniable demand for what they provide.

I will be increasing my holdings in Ondas Wednesday and into earnings if the shares continue to sell off. I am also reiterating my $17 price target with an upward bias.

At the time of publication, Guilfoyle was long ONDS equity.