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On Monday, H.C. Wainwright analyst Scott Buck adjusted the price target on Knightscope Inc (NASDAQ:KSCP), a security technology company, to $12.00 from the previous $16.00, while still maintaining a Buy rating on the stock. Buck’s reassessment follows a significant drop in Knightscope’s share price, which has fallen 78.8% in 2025, compared to an 18.1% decline in the Russell 2000 Index. InvestingPro data shows the stock is currently trading at $2.67, near its 52-week low of $2.52, with technical indicators suggesting oversold conditions.
Buck noted that the decline in Knightscope’s stock does not reflect the company’s positive business momentum or the favorable underlying secular trends. Instead, he attributed the recent deterioration in share value to changing investor risk tolerances amid heightened macroeconomic uncertainty, which is largely beyond the company’s influence. According to InvestingPro analysis, while the company holds more cash than debt on its balance sheet, it’s currently experiencing weak gross profit margins and rapid cash burn. Subscribers can access 14 additional ProTips and comprehensive financial metrics for deeper analysis.
Knightscope has made several strategic changes in 2024 that Buck believes have set the stage for growth starting in 2025 and continuing into 2026. These changes include cleaning up the balance sheet, reducing the executive management team, improving operating efficiencies, and expanding the company’s federal government pipeline. With a current market capitalization of just $11.25 million and analyst price targets ranging from $9 to $32, InvestingPro’s Fair Value analysis suggests the stock may be undervalued at current levels.
Additionally, on April 3, Knightscope announced $2.0 million in sales, renewals, and customer expansions. Buck interprets this as a more accurate representation of the positive momentum in the company’s operations. He anticipates that new contracts and positive news flow will serve as catalysts for the stock this year, ahead of stronger operating results expected in the second half of 2025.
Despite the current undervaluation of small capitalization technology companies compared to three months ago, Buck remains optimistic about Knightscope’s long-term prospects. He suggests that investors take advantage of the recent weakness in the stock to build their positions in anticipation of more favorable news and operating results later in the year. Buck’s revised price target reflects a lowered valuation multiple, in line with the recent market adjustments.
In other recent news, Knightscope, Inc. has announced a registered direct offering of 625,000 shares of common stock at $2.75 each, aiming to raise approximately $1.7 million in gross proceeds. The funds are intended for working capital and general corporate purposes, with H.C. Wainwright & Co. serving as the exclusive placement agent. Additionally, Knightscope has expanded its security solutions into the healthcare sector, deploying its technologies at multiple healthcare facilities, including a Texas hospital and a Department of Health facility in the Northeast. These deployments feature Knightscope’s Emergency Communication Devices and K5 Autonomous Security Robots, enhancing security and emergency response capabilities.
Knightscope has also achieved full Authority to Operate under the Federal Risk and Authorization Management Program (FedRAMP), allowing the company to expand its security solutions across federal agencies. This authorization underscores Knightscope’s compliance with federal cybersecurity standards, facilitating the adoption of its technologies by federal agencies. Mercedes Soria, EVP and Chief Intelligence Officer at Knightscope, emphasized the significance of this milestone in advancing the company’s mission to enhance public safety. The FedRAMP authorization builds on previous approvals from the Department of Veterans Affairs, positioning Knightscope to serve the federal government marketplace.
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