Ondas Inc. (NASDAQ:ONDS) stock is surging on Monday due to an acceleration of massive defense contract wins, capped off by a newly announced strategic investment in FPF Defense.
Ondas and RSE Ventures co-led the strategic investment in FPF Defense, a defense technology company developing autonomous counter-drone systems, the companies announced on Friday.
Financial terms of the transaction were not disclosed.
Nasdaq futures are up 1.32% while S&P 500 futures have gained 0.81%.
Target Capabilities And Cost Asymmetry
The investment will support the development of FPF’s SmartFlak counter-unmanned aerial system, which uses the Hammerhead autonomous interceptor to target Shahed-class one-way attack drones.
FPF stated the system addresses the cost gap between low-cost attack drones and traditional missile interceptors.
As part of the deal, FPF will relocate its headquarters to West Palm Beach, Florida. FPF joins Ondas in West Palm Beach as both companies work to expand the defense technology ecosystem in the region.
Executive Comments And Operational Capital
“Ondas is focused on solving the most critical challenges in autonomous and counter-drone warfare, and we uphold the highest standards for the teams we partner with,” Ondas CEO Eric Brock said.
“FPF cleared that bar immediately with a proven team, a disruptive cost advantage, and a mission-critical capability that the nation requires at scale.”
Technical Analysis
Ondas remains in a longer-term recovery phase. The stock is trading 11.4% below its 50-day simple moving average of $9.07 and 14.5% below its 200-day simple moving average of $9.39. Those levels could act as resistance after the death cross recorded in July, when the 50-day average moved below the 200-day average.
The shorter-term trend has improved. The stock is trading 7.2% above its 20-day simple moving average of $7.49 and above its 20-day exponential moving average of $7.72, indicating recent buying momentum.
The relative strength index stands at 49.15, suggesting neutral momentum. The reading does not indicate that the stock is overbought or oversold.
Key technical levels include:
- Support: $7.00, a nearby round-number level that could attract buyers.
- Resistance: $8.50, near the 200-day exponential moving average.
Earnings And Analyst Outlook
Ondas is expected to report second-quarter results on August 11.
- EPS estimate: Loss of 6 cents per share, compared with a loss of 8 cents a year earlier.
- Revenue estimate: $65.8 million, up from $6.27 million a year earlier.
- Valuation: The stock trades at a price-to-earnings ratio of 86.8.
Wall Street maintains a Strong Buy consensus with an average price forecast of $18.50. Recent analyst actions include:
- Needham reaffirmed its Buy rating and lowered its price forecast to $19 on July 7.
- Needham maintained its Buy rating and $23 price forecast on May 19.
- Northland Capital Markets maintained its Outperform rating and raised its price forecast to $18 on March 26.
Top ETF Exposure
- Defiance Drone and Modern Warfare ETF (NYSE:JEDI): 6.98% Weight
- REX Drone ETF (NASDAQ:DRNZ): 11.67% Weight
- Leverage Shares 2X Long ONDS Daily ETF (NASDAQ:ONDG): 0.07% Weight
Significance: Because ONDS carries such a heavy weight in these funds, any significant inflows or outflows for these ETFs will likely force automatic buying or selling of the stock.
ONDS Stock Price Activity: Ondas shares were up 2.69% at $8.01 during premarket trading on Monday, according to Benzinga Pro data.
Photo by T. Schneider via Shutterstock
