Here's Why I Wouldn't Touch Ondas With a 10‑Foot Pole After This Parabolic Run

If you've been watching Ondas (NASDAQ: ONDS), you may have noticed that its gain over the past year is around 944%. That's enough to turn a single $10,000 investment into $104,000. (If you'd put that money in the S&P 500 instead, you'd still have enjoyed a remarkable 24% gain, turning your $10,000 into $12,400.)

Such parabolic performances draw attention and lead more people to buy and own shares -- which can push the shares even higher. But should you invest in Ondas at this point? I don't think I want to.

Image source: Getty Images.

Meet Ondas

Ondas is a tech company, and it describes itself as "a leading provider of autonomous systems and private wireless solutions through its business units Ondas Autonomous Systems (OAS), Ondas Capital, and Ondas Networks. Ondas' technologies offer a powerful combination of aerial intelligence and next-generation connectivity to enhance security, operational efficiency, and data-driven decision-making across essential industries."

Some of those words should have made you think of drones -- and other products and services used by the military. Given the war in Iran and many Middle East countries, along with the U.S. and others, needing to spend on defense and/or offense, Ondas has benefited. For example, in December of 2025, it won a government contract to set up a border-protection system featuring thousands of drones. A few weeks ago, it announced that it received a $10 million order as part of a $50 million award for a border demining project along the Israel-Syria border.

Indeed, the company's incredible past quarter, the first of 2026, featured revenue of $50 million, a tenfold increase year over year and 66% higher than the previous quarter. Gross profit margin rose to 49% from 35% the year before (and 42% in the previous quarter) -- and the company's cash position surged from $66 million at the end of 2025 to $1.5 billion. Ondas' backlog of orders rose to more than $450 million, assuring it a lot more future revenue.

Why am I avoiding Ondas?

The key reason is its valuation. That parabolic run has left it with a recent price-to-sales ratio of 36.3, well above the five-year average of 10.6. It's also not yet profitable, with management expecting adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) profitability by the first quarter of 2028.

Should you avoid it, too? Well, it depends. As I write this, its market value is about $5.3 billion. Do you see it becoming, say, a $10 billion company in the future? Then maybe it will be a good addition to your portfolio. But keep in mind that right now, you'd be paying $36 for each dollar of revenue. That's much more than you'd pay for lots of other great growth stocks. And if you'd like some diversification to reduce your risk, consider a solid tech exchange-traded fund.

Selena Maranjian has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Ondas. The Motley Fool has a disclosure policy.