Options data reveals where Ondas stock is headed after Q3 earnings

Ondas Holdings Inc (NASDAQ: ONDS) rallied more than 20% on Thursday after the autonomous drone systems company reported market-beating financials for its third quarter.

What excited investors in particular was ONDS revenue that came in at a record $10.1 million – and the management’s raised guidance for the full year.

Still, options traders are pricing in potential for a meaningful decline in Ondas shares through the remainder of 2025 – and for good reason too.

Ondas stock price outlook based on options data

Despite a better-than-expected Q3, options contracts expiring in mid-January continue to signal a more than 40% potential decline in ONDS stock to $3.58.

In the near-term (through the end of November) as well, the expected move of about 18.82% also suggests Ondo Holdings could be trading at $4.47 only within the next couple of weeks.

Options traders appear dovish on the Nasdaq-listed firm perhaps because it remains, despite record revenue, it remains deeply unprofitable on a fundamental operational level.

More importantly, the quality of the so-called “record” revenue is questionable as well, given the company’s relatively low gross margin of 26%, indicating its products and services are expensive to produce or deliver.

If Ondas fails to substantially improve its gross margin as it scales production, the long-term path to turning a profit will be much harder, even with a strong revenue outlook.

Acquisition spree isn’t entirely positive for ONDS shares

Another metric that management hailed in the Q3 earnings release was the cash balance that stood at about $840 million on a pro-forma basis.

However, much of it has been achieved through massive equity offerings and warrant exercises – both of which significantly dilute the stakes of existing shareholders.

In fact, Ondas has recently proposed amendment to double authorised common shares, signalling massive risk of further dilution.

Moreover, the Nasdaq-listed firm relies heavily on acquisitions (Sentrycs, Apeiro Motion, 4M, Rift Dynamics) to drive top-line growth, which makes it that much harder to value the core business.

Plus, these transactions come with a built-in integration risk as well.

While the current cash balance is strong, a poorly executed or overpriced acquisition spree could quickly deplete this buffer and weigh on Ondas stock in 2026.

How to play Ondas Holdings heading into 2026

The aforementioned risks, put together with the ONDS shares’ alarmingly high valuation of roughly 300x sales, warrant cutting exposure despite the strong headline numbers in fiscal Q3.

And it’s not like Ondas stock pays a dividend to incentivize ownership at current levels either.

In short, the Boston-headquartered firm’s Q3 may offer a short-term boost, but its steep valuation, persistent losses, dilution risks, and questionable revenue quality recommend caution.

Without clear profitability or margin improvement, investors may find better opportunities elsewhere as ONDS faces mounting pressure heading into 2026.

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