ONDS: Shorts Dig In as Borrow Costs Tick Back Up

Ondas Inc. enters the week before its November 13 earnings with a short position that has now been structurally anchored for months, a stock price that has fallen further, and borrow costs that have reversed their September decline.

The pattern documented in the two most recent notes on this stock has not broken. Short interest as a percentage of free float is now 63.9%, up 1.1% on the week and 3% over the past month. The October 16 report noted the position at 44.3%, a figure that reflected a narrower free float estimate at the time; the current ORTEX daily estimate uses an updated float calculation. What has not changed is the direction: short interest is drifting higher, not lower. Availability has been 0% every single session in the data going back to early September. Every share in the lending pool is lent out. This is, by definition, the tightest borrow market the stock has seen in at least a year, and it has remained that way for six consecutive weeks without triggering any meaningful squeeze. New shorts cannot add at this point without locating fresh inventory; existing ones are simply holding.

What has shifted is the cost of holding. Borrow costs rose 12% on the week to 3.91%, reversing the steady decline from above 5% in mid-September. That September-to-October fall in carry burden was, as the October 14 note argued, the most plausible explanation for why existing shorts were not covering despite a frozen borrow market. The uptick this week removes a small part of that comfort. Cost to borrow remains well below the September highs, but the direction has changed. The ORTEX short score of 72.5 is a tick above last week's 71.7 and has risen every session over the past ten days, placing the stock in the second percentile of the full universe on that measure. The ORTEX factor score for utilization rank confirms the same picture, sitting in the fourth percentile.

The stock closed at $6.10 on October 20, down 9.1% on the week and 17.5% over the past month. That is another leg lower from the $6.35 recorded when the October 16 report was filed, itself a drop from $6.71 at the October 14 note. The price has now fallen without a corresponding move in short interest in either direction. Peers have also struggled: MOB fell 20.8% on the week, ANET dropped 11.4%, and LTRX shed 8.8%. The communications equipment sector is under broad pressure, which mutes any signal from ONDS's own decline.

The Street remains constructive in rating but has not moved recently. Citizens initiated coverage on October 5 at Market Outperform with a $14 target, the most recent action. Needham holds its Buy rating at $19, and Ladenburg Thalmann raised its target to $22.75 after the August earnings print. The consensus mean target of $18.88 implies more than 200% upside from the current price, a gap that reflects the bull case: a rapid acquisition-led build to $1.5 billion of revenue by FY28, an estimated $118 billion international TAM, and roughly $613 million of backlog. The bear case sits squarely on execution. The revenue trajectory from $50.7 million in FY25 to $1.5 billion in three years is contingent on smooth contract conversion, sustained defense procurement, and operating leverage that has not yet materialized. Dilution is a separate concern: approximately 590 million basic shares outstanding after the September acquisition closings, plus around 195 million warrants. The EPS surprise factor score of 96 is a genuine positive, and the analyst recommendation differential ranks in the 98th percentile, but neither has been enough to move the stock against the weight of the short book.

Institutional ownership data is worth noting. BlackRock reported 39.5 million shares at September 30, a net addition of 30.2 million in the most recent quarter. State Street added 9.2 million shares over the same period. Those are large flows into a name where 63.9% of the float is simultaneously short. On the activist register, Joseph Popolo filed a Schedule 13D amendment in June 2025 reflecting a stake that had fallen to 4.95% from 8.32%. Positions on that register are as last disclosed and holders dropping below 5% may not file again, so the current state of that position is unknown.

Options traders are slightly less defensive than their recent average. The put/call ratio of 0.46 is fractionally below the 20-day mean of 0.48 and about 1.4 standard deviations below it, the opposite of a hedging spike. That mild skew toward calls is the one data point that cuts against the broader bearish configuration, though with a PCR 52-week low of 0.20, the current reading is far from extreme in either direction.

The November 13 earnings print is the next scheduled event that could shift any of these readings. The previous August report produced a 5.4% next-day decline and a 14.2% five-day loss, so the market's recent history of punishing these prints is worth watching as positioning into that date develops.