The global drone industry has reached a pivotal growth phase driven by increasing uptake across commercial, government and military sectors.

According to a report from Mordor Intelligence, the global drone tech market is expected to witness a CAGR of 9.1% from 2027 to 2032. The convergence of drones with artificial intelligence (AI), cloud computing and edge processing is further driving adoption across verticals.

Ondas Inc. (ONDS Quick QuoteONDS - Free Report) and Draganfly (DPRO Quick QuoteDPRO - Free Report) both operate in the defense and unmanned systems domain, but from very different positions in terms of scale and maturity.

These companies bring unique strengths to the table, which make this an intriguing comparison for investors.

So, the question arises: which stock makes a better investment pick at present? Let us dive into the fundamentals, valuations, growth outlook and risks for each company.

The Case for ONDS

Ondas’ investment appeal is supported by its rapidly expanding autonomous defense portfolio, substantial order momentum and growing exposure to mission-critical defense programs. On Oct. 7, 2026, ONDS announced that it has secured more than $165 million in aggregate orders from the second half of August through Oct. 1. This, when combined with roughly $105 million of orders disclosed on the last earnings call (Aug. 13, 2026), brings total orders to more than $270 million since June 30, improving revenue visibility into 2027.

Management noted that broad-based strength across product categories and geographies contributed to strong order activity. Importantly, the latest wins include strategically significant orders for ULTRA and IonStrike, with both platforms progressing through key customer-validation milestones. ONDS acquired ULTRA through the DZYNE buyout. ULTRA is a long-endurance autonomous aircraft delivering multi-day ISR, while IonStrike targets the growing counter-UAS market, including defense against Shahed-class drones.

The orders also include the recent $56 million Electronic Safe & Arm Devices award, supporting a European loitering munition program. This represents an important early commercial development following Ondas’ acquisition of GATE Technologies and Bron Technologies last month. In September, Ondas also acquired three defense technology businesses (Insignito, Ottopia Defense and Caribou Labs) for $56 million, payable in cash or its common stock, with potential performance-based earn-outs of up to $32 million based upon achieving key performance milestones through 2028.

ONDS is expanding its counter-drone reach through innovation. In September, Ondas launched Dronebuster REACH, extending its non-kinetic counter-UAS capabilities. The first Dronebuster REACH system is already under contract for delivery to the Office of Naval Research following customer acceptance testing. The system will support C-UAS research, evaluation and testing activities, providing an early validation point for Ondas’ new product.

ONDS is expanding its counter-drone reach through innovation. In September, Ondas launched Dronebuster REACH, extending its non-kinetic counter-UAS capabilities. The first Dronebuster REACH system is already under contract for delivery to the Office of Naval Research following customer acceptance testing. The system will support C-UAS research, evaluation and testing activities, providing an early validation point for Ondas’ new product.

Ondas Holdings Inc. Price, Consensus and EPS Surprise

Ondas Holdings Inc. price-consensus-eps-surprise-chart | Ondas Holdings Inc. Quote

Ondas is also strengthening its position in the airborne defense and aircraft protection market following the successful installation and European Union Aviation Safety Agency certification of the Airborne Missile Protection System (“AMPS”) on the Bombardier Global 7500 aircraft. Developed by its subsidiary BIRD Aerosystems, AMPS incorporates advanced missile warning, threat detection and confirmation, tracking and directional infrared countermeasures capabilities to protect aircraft against infrared-guided missile threats.

For all the excitement surrounding revenue growth, second-half ramp and profitability remain the key tests for ONDS. The company updated its full-year revenue outlook to $525-$550 million from the previous target of at least $525 million, representing more than 10 times the reported figure for 2025. At the midpoint, the outlook implies more than 30% year-over-year organic growth on a pro forma basis. The pace of order conversion and production scaling will determine whether ONDS can deliver the steep second-half ramp embedded in its outlook

Coming to profitability, second-quarter operating expenses were $199 million, substantially exceeding the quarterly revenues of $83.8 million. At the last earnings call, management cautioned about some gross-margin pressure during the second half of 2026 because of product mix and excess capacity associated with newly acquired businesses.

However, the company expects adjusted EBITDA losses to narrow beginning in the third quarter and has pulled forward its profitability timeline. Management now targets adjusted EBITDA profitability for the operating platform, including OAS and Ondas Sentinel, by the fourth quarter of 2026 and company-wide adjusted EBITDA profitability by the fourth quarter of 2027.

The rapid pace of acquisitions also creates execution risks. Integrating multiple businesses into a broader portfolio while meeting rising delivery schedules increases execution risk across systems, manufacturing and product roadmaps. Delays could slow backlog conversion and postpone expected operating leverage.

The Case for DPRO

Draganfly is a Canada-based drone solutions and systems developer. The company’s drones include the Commander 3XL, Heavy Lift Drone, Commander 2 and Draganfly Medical Response Drone and the Apex drone aimed at ISR, marketed for the military and public safety.

Draganfly’s recent commercial progress has strengthened its growth prospects in the military drone market. In September, the company announced a five-year contract with the Government of Canada to supply low-cost tactical ISR unmanned aircraft systems to the Canadian Armed Forces. DPRO added that the agreement includes an initial firm commitment for 100 systems, along with associated ground control stations, support equipment, payloads, data links, documentation, spare parts and training. More importantly, the contract provides options for the Canadian Armed Forces to acquire up to 4,900 additional systems, bringing the potential total to 5,000 units.

The contract followed the company's selection as a qualified supplier across all five capability streams of Canada's Defense Drone Initiative Marketplace. 

DPRO is also focused on expansion within U.S. defense markets. The company recently announced defense sales of its Heavy Lift and Commander 3XL systems across U.S. light infantry divisions. The announcement included inaugural Heavy Lift sales and follow-on Commander 3XL purchases from an existing customer already operating Draganfly's Flex systems. In October, DPRO set up Draganfly Defense USA, a subsidiary focused on expanding its footprint in the country defense markets and addressing the defense-specific compliance, regulatory and security requirements.

In September, Draganfly also received a $5 million strategic investment from Unusual Machines and a leading U.S. Investment Fund, totaling $10 million. DPRO plans to use net proceeds to advance the development of its strategic capabilities and meet working capital requirements.

Draganfly Inc. Price, Consensus and EPS Surprise

Draganfly Inc. price-consensus-eps-surprise-chart | Draganfly Inc. Quote

Draganfly is also expanding into counter-UAS and autonomous strike applications as well as public safety applications. On the last earnings call, management highlighted its selection alongside F4 Defense International for an initial development contract by DEVCOM Army Research Laboratory for a rapidly deployable, multilayered counter-drone system. 

DPRO's colloboration with the International Association of Campus Law Enforcement Administrators provides a framework to offer drone systems, training and implementation services to affliated educational institutions. During the second-quarter earnings call, management indicated that more than 50 campuses were in its initial pipeline.

Despite its encouraging strategic progress, Draganfly's financial performance remains a significant concern. DPRO has a relatively small revenue base compared with its expanding operating expenses. Second-quarter 2026 revenues increased 26% year over year to approximately C$2.66 million while operating expenses surged to C$16.1 million. This resulted in an operating loss of C$15.6 million for the quarter. The disconnect between increasing commercial opportunities and relatively limited revenue realization remains a key concern.

Price Performance & Valuation for ONDS & DPRO

Year to date, both ONDS and DPRO are down 29.7% and 47.2%, respectively.

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ONDS trades at a forward 12-month price-to-sales ratio of 4.17X, lower than DPRO’s 4.56X.

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How Do the Consensus Estimates Compare for ONDS & DPRO?

For both ONDS and DPRO, earnings estimates for the current year have remained unchanged over the past 60 days.

ONDS

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DPRO

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ONDS or DPRO: Which Is a Better Pick?

Ondas appears relatively better positioned, backed by its considerably larger revenue base and solid order momentum. ONDS’ diversified defense portfolio gives it an edge over DPRO, which is still in the early stages of translating contract opportunities into meaningful revenues. Both

ONDS and DPRO carry a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.