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Momentum Continues for Ondas Holdings Inc
It’s tough to argue that a stock with upward momentum is overlooked; it’s obviously getting attention from somewhere. But one tech stock that’s doing exceptionally well but doesn’t seem to garner a lot of attention is Ondas Holdings Inc (NASDAQ:ONDS).
It might have to do with the fact that the Nantucket, MA-based company only went public in December 2020. Not the best timing.
And frankly, ONDS stock has been on a bit of a roller-coaster ride since then. As of this writing, Ondas Holdings stock is:
- Up by 47% over the last month
- Down by 20% over the last six months
- Up by 9.5% year-to-date
- Down by 24.5% year-over-year
Despite the big moves in both directions, there are more than enough reasons to maintain a bullish stance on Ondas Holdings Inc. In fact, 2021 was a transformational year for this developer of private licensed wireless drones and automated data solutions for mission-critical industrial markets.
Ondas Holdings Inc reported wonderful fourth-quarter and full-year results, acquired American Robotics, Inc., has been gaining a larger footprint in industrial markets, and has transitioned from developing its wireless radio system to delivering it.
On top of that, Ondas Holdings Inc has announced a number of new orders, launched a new joint product development program with Siemens Ltd, and has secured purchase orders from Chevron Corporation (NYSE:CVX) and ConocoPhillips (NYSE:COP).
This has positioned the company for strong revenue growth and share-price momentum in 2022.
Chart courtesy of StockCharts.com
About ONDS Stock
Ondas Holdings, through its subsidiaries, provides private wireless, drone, and automated data solutions to clients in the U.S. and around the world. (Source: “Fourth Quarter and Full Year 2021 Earnings Release,” Ondas Holdings Inc, March 22, 2022.)
The company’s end markets include railroads, utilities, oil and gas, transportation, aviation (including drones), and government entities.
Ondas Holdings Inc operates through two segments, Ondas Networks and American Robotics.
Ondas Networks develops proprietary, software-based wireless broadband technology for established and emerging industrial markets. The segment’s “FullMAX” platform enables mission-critical Internet of Things (IoT) applications by overcoming the bandwidth limitations of today’s legacy private licensed wireless networks.
American Robotics designs, develops, and markets industrial drone products for rugged, real-world environments. The segment’s “Scout System” is an automated, artificial intelligence (AI)-powered drone that’s capable of continuous, remote operation. (Source: “Ondas Completes Strategic Acquisition of American Robotics,” Business Wire, August 5, 2021.)
The Scout System is the first drone system approved by the Federal Aviation Administration (FAA) for automated operation beyond visual line of sight without an on-site human operator.
That’s great for oil and railroad companies that want to use unmanned drones to monitor their operations. The Scout System can also be used in fields such as homeland security, defense, and transportation.
In July 2021, Ondas Holdings Inc announced that Stockpile Reports selected the Scout System to build out its automated drone program. Stockpile Reports is a data solutions provider to the bulk materials industry, serving more than 300 companies in 48 countries.
That same month, American Robotics announced it had received a purchase order from a Fortune 100 oil and gas company for the Scout System.
Agreement to Acquire Ardenna
Ondas Holdings Inc continues to execute strategic acquisitions.
On March 21, the company announced that it had entered a definitive agreement to acquire Ardenna Inc., a leading provider of image-processing and machine-learning software for rail infrastructure monitoring and inspections. (Source: “Ondas Holdings Announces Definitive Agreement to Acquire Ardenna,” Ondas Holdings Inc, March 21, 2022.)
With the acquisition, which is expected to close in the second quarter, American Robotics’ automated drone platform will leverage Ardenna’s “Rail-Inspector” analytics software to accelerate growth in the rail industry.
Ardenna’s current customers include the largest freight railroad networks in North America.
Excellent Q4 Results
For the fourth quarter ended December 31, 2021, Ondas Holdings Inc announced that its net revenue increased by 200% year-over-year to $571,246. (Source: Ondas Holdings Inc, March 22, 2022, op. cit.)
The company’s gross profit in the quarter came in at $166,045, versus $45,610 in the same prior-year period.
Ondas Holdings Inc’s full-year revenue advanced 34% year-over-year to $2.9 million. Its full-year gross profit increased by 18% to $1.1 million.
The company ended 2021 with cash and cash equivalents of approximately $40.8 million, compared to $26.1 million at the end of 2020.
Analyst Take
As mentioned earlier, Ondas Holdings Inc is a leading provider of private wireless, drone, and automated data solutions. And thanks to the company’s product launches, strategic acquisitions, and customer wins, Ondas Holdings stock has been on a tear.
The company entered 2022 with strong momentum in both of its business units. Ondas Networks is gearing up for significant revenue growth over the coming quarters, and American Robotics has been experiencing high customer engagement with the introduction of Scout Systems to new industrial markets.
With a solid balance sheet, Ondas Holdings Inc has more than enough liquidity to execute its growth strategy.
All that is why ONDS stock could keep rising in value.
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