Knightscope, Inc. (KSCP) | Investment Case

1. Company Snapshot

1.a. Company Description

Knightscope, Inc.designs, develops, builds, deploys, and supports physical security technologies in the United States.The company's solutions combine the physical presence of autonomous security robots (ASR) with real-time on-site data collection and analysis, and a human-machine interface to reduce crime.

Its products include K3 and K5 ASRs designed to roam a geo-fenced area autonomously by utilizing numerous sensors and lasers, either on a random basis or based on a particular patrolling algorithm to navigate around people, vehicles, and objects in dynamic indoor or outdoor environments; K1, an ASR for used in indoors or outdoors and at ingress/egress points for both people and vehicles; and K7, a multi-terrain ASR.The company also develops and operates the Knightscope security operations center (KSOC), a browser-based interface, which allows real-time data access service to its clients for alert of an abnormal event; and Knightscope network operations center (KNOC), a custom set of tools that enables it to manage and monitor the network of ASRs with alerts related to critical indicators and statistics, including charging, software, navigation, and temperatures, as well as to execute over-the-air software upgrades, patches, and other related items.In addition, it offers Knightscope+ remote monitoring, an optional service for clients that operate without a fully staffed 24/7 security operations center.

The company serves law enforcement agencies, hospitals, and security teams.Knightscope, Inc.was incorporated in 2013 and is headquartered in Mountain View, California.

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1.b. Last Insights on KSCP

Knightscope's recent performance was negatively impacted by a Q1 loss of $1.28 per share, despite topping revenue estimates. The company's gross margin loss improved to (23%), a notable improvement from (64%) in Q1 2024, but the net loss decreased to $6.9 million, a 19% improvement. The company's revenue of $2.9 million, up 29% compared to $2.3 million in Q1 2024, was not enough to offset the losses.

1.c. Company Highlights

Last Price	4.92
Change Percentage	7.89%
Open	4.46
Previous Close	4.56
Market Cap ( Millions)	40
Volume	421727
Year High	24.11
Year Low	2.45
M A 50	5.74
M A 200	5.94

FCF Yield	-54.37%
Dividend Yield	0.00%
ROE	-213.31%
Debt / Equity	50.18%
Net Debt / EBIDTA	2.51%
Price To Book	2.28
Price Earnings Ratio	-1.11
Price To FCF	-1.84
Price To sales	3.66
EV / EBITDA	-1.59

2. Knightscope Posts Mixed Q1 Results Amidst Strategic Transformation

KSCP delivered a mixed Q1 performance, with revenues rising 29% year-over-year to $2.9 million, driven by growth in both service and product revenues. Service revenue climbed 25% to $2.1 million, while product revenue surged 44% to $809,000, benefiting from distribution partnerships and strong client retention. The company also made progress on its path to profitability, with gross loss narrowing to $700,000, reflecting cost savings and operational efficiencies. Operating expenses declined 9% to $6.2 million, though R&D costs rose 35% to $2.1 million. Net loss improved 11% to $6.8 million, with a reduced loss per share of $1.29, beating consensus estimates of $1.47. The company ended the quarter with a cash balance of $11.2 million, up from the prior year and Q4 2024. CFO Apoorv Dwivedi noted, "We are making steady progress toward achieving positive gross margins and scaling our operations efficiently."

Publication Date: May -16

                                    📋 Highlights
                                    Revenue Growth:
                                                - 29% year-over-year increase to $2.9 million, driven by service and product revenue growth.
Gross Loss Improvement:
                                                - Reduced to $700,000, reflecting cost savings and progress toward positive margins.
Operating Expenses:
                                                - Decreased 9% to $6.2 million, with R&D up 35% to $2.1 million.
Net Loss:
                                                - Improved 11% to $6.8 million, with a reduced loss per share of $1.29.
Cash Balance:
                                                - Strengthened to $11.2 million, up from the prior year and Q4 2024.

                                

Operational Progress and Strategic Initiatives

KSCP highlighted significant operational improvements over the past 15 months, including the consolidation of facilities, a new sales team, and enhanced cost discipline. The company secured a new 33,000-square-foot headquarters, which is expected to enhance collaboration and support future growth. Manufacturing efficiency has improved, with production time for robots reduced from 120 hours to 60 hours, and further reductions to 20 hours targeted. The backlog stood at $2.5 million, with $1.9 million in ECDs and $600,000 in ASRs. Management emphasized its focus on long-term growth, prioritizing revenue scaling and cost management over short-term profitability. Knightscope also made strides in government contracts, achieving FedRAMP authorization and pursuing opportunities with multiple federal agencies.

Valuation and Future Outlook

Trading at a P/S ratio of 3.37 and an EV/EBITDA of -1.07, Knightscope's valuation reflects its growth potential despite ongoing losses. The company is laser-focused on expanding its product portfolio, improving manufacturing efficiency, and securing strategic partnerships. With a strengthened cash position and a clear roadmap for scaling, Knightscope appears well-positioned to capitalize on its unique position at the intersection of public safety and robotics. However, the company's ability to accelerate growth and achieve sustained profitability remains critical to justifying its current valuation.

3. NewsRoom

Wall Street Analysts Think Knightscope (KSCP) Could Surge 170.17%: Read This Before Placing a Bet

Oct -22

Source: zacks.com

Knightscope Surpasses Yet Another $1M Milestone in New Sales Won and Renewals

Oct -14

Source: businesswire.com

Strength Seen in Knightscope (KSCP): Can Its 19.0% Jump Turn into More Strength?

Oct -07

Source: zacks.com

Wall Street Analysts Believe Knightscope (KSCP) Could Rally 148.86%: Here's is How to Trade

Oct -02

Source: zacks.com

Does Knightscope (KSCP) Have the Potential to Rally 163.4% as Wall Street Analysts Expect?

Sep -15

Source: zacks.com

AITX's RAD-M Appoints Former Knightscope Co-Founder Stacy Stephens as Senior Vice President of Sales

Sep -08

Source: newsfilecorp.com

Knightscope Signs Another $1M in Renewals, Expansions and New Sales Won

Sep -04

Source: businesswire.com

Knightscope Reports Second Quarter 2025 Financial Results

Aug -13

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.94%)

6. Segments

Electronic Control Device

Expected Growth: 10.95%

Knightscope's Electronic Control Device growth is driven by increasing demand for autonomous security solutions, government investments in smart city infrastructure, and rising concerns over public safety. Additionally, the device's ability to provide real-time data and analytics, enhancing law enforcement's efficiency and effectiveness, contributes to its rapid adoption.

Autonomous Security Robots

Expected Growth: 10.93%

Increasing demand for autonomous security solutions, driven by rising crime rates and security concerns, coupled with advancements in AI and robotics technology, are fueling growth for Knightscope's autonomous security robots. Additionally, cost savings and efficiency gains from automation are attracting customers, contributing to the 10.93% growth rate.

7. Detailed Products

K1 Autonomous Security Robot

A fully autonomous security robot designed for outdoor security and surveillance, equipped with advanced sensors and AI-powered analytics.

K3 Autonomous Indoor Security Robot

A fully autonomous security robot designed for indoor security and surveillance, equipped with advanced sensors and AI-powered analytics.

K5 Autonomous Security Robot

A fully autonomous security robot designed for outdoor security and surveillance, equipped with advanced sensors and AI-powered analytics.

KSOC (Knightscope Security Operations Center)

A cloud-based security operations center that provides real-time monitoring and analytics for Knightscope's autonomous security robots.

KAI (Knightscope AI)

An AI-powered analytics platform that provides real-time insights and alerts for security threats and anomalies.

8. Knightscope, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Knightscope's autonomous security robots are highly specialized and customized, making it difficult for substitutes to emerge.

Bargaining Power Of Customers

Knightscope's customers are primarily large enterprises and government agencies, which have limited bargaining power due to the customized nature of the company's products.

Bargaining Power Of Suppliers

Knightscope relies on a few key suppliers for its robotic components, giving them some bargaining power, but the company's strong relationships and diversified supply chain mitigate this risk.

Threat Of New Entrants

The autonomous security robot market is rapidly growing, and new entrants with innovative technologies could potentially disrupt Knightscope's market share.

Intensity Of Rivalry

The autonomous security robot market is moderately competitive, with a few established players, but Knightscope's strong brand recognition and patented technology give it a competitive edge.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	22.67%
Debt Cost	3.95%
Equity Weight	77.33%
Equity Cost	14.24%
WACC	11.91%
Leverage	29.32%

11. Quality Control: Knightscope, Inc. passed 4 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Arlo Technologies

A-Score: 4.3/10

Value: 4.9

Growth: 5.7

Quality: 3.7

Yield: 0.0

Momentum: 8.5

Volatility: 3.3

1-Year Total Return ->

Evolv Technologies Holdings

A-Score: 4.2/10

Value: 6.0

Growth: 4.7

Quality: 3.6

Yield: 0.0

Momentum: 9.5

Volatility: 1.7

1-Year Total Return ->

Mistras

A-Score: 4.2/10

Value: 6.8

Growth: 4.3

Quality: 5.5

Yield: 0.0

Momentum: 3.5

Volatility: 5.3

1-Year Total Return ->

Bridger Aerospace

A-Score: 3.7/10

Value: 7.8

Growth: 6.4

Quality: 4.8

Yield: 0.0

Momentum: 2.0

Volatility: 1.0

1-Year Total Return ->

Knightscope

A-Score: 3.2/10

Value: 7.4

Growth: 4.7

Quality: 3.2

Yield: 0.0

Momentum: 3.5

Volatility: 0.3

1-Year Total Return ->

Iveda Solutions

A-Score: 3.1/10

Value: 8.6

Growth: 3.6

Quality: 2.8

Yield: 0.0

Momentum: 3.0

Volatility: 0.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

18.20%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

11.91%

Knightscope, Inc. - US49907V1026

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on KSCP

1.c. Company Highlights

More Volatile

Lower Quality

Average Yield

Earnings Miss

Revenues Miss

Revenues Beats

Weak Momentum

Strong Momentum

Earnings Beats

Cheaper

Fairly Valued

Stable Momentum

2. Knightscope Posts Mixed Q1 Results Amidst Strategic Transformation

Operational Progress and Strategic Initiatives

Valuation and Future Outlook

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.94%)

6. Segments

Electronic Control Device

Expected Growth: 10.95%

Autonomous Security Robots

Expected Growth: 10.93%

7. Detailed Products

K1 Autonomous Security Robot

K3 Autonomous Indoor Security Robot

K5 Autonomous Security Robot

KSOC (Knightscope Security Operations Center)

KAI (Knightscope AI)

8. Knightscope, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Knightscope, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

4.92$

Current Price

4.92$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA