Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
Ticker: KSCP
Current Price: ~$4.98
Market Cap: ~$36M
Industry: Security Robotics / AI
Analytical Focus
Knightscope is an early mover in autonomous physical security, offering AI-powered robots under a subscription model (RaaS) to replace traditional human patrols. Targeting disruption of the $138 billion U.S. private security industry, the company addresses key trends: labor shortages, 24/7 surveillance requirements, and cost pressures.
This is an atypical public equity: pre-profit and venture-like in stage, yet with the liquidity and access of a traditional listed stock. It provides exposure to commercial robotics and applied AI within a retail-accessible format — with asymmetric potential if operational milestones are met.
Business Model & Monetization
- Clients lease robots at $6–$9/hour ($50k–$75k/year/unit).
- Current ARR is ~$5–6 million, with a $5.5 million multi-year backlog.
- Gross margins reached 16% in Q1 2024, expected to rise above 30% as fleet scales.
- Goal: Deploy 1,000+ units, enabling $60 million+ ARR with scalable economics.
Market Opportunity
- U.S. private security is a $138 billion fragmented market.
- Just 1% penetration (~11,000 units) would imply a $600 million annual revenue opportunity.
- Gradual adoption of robotics in enterprise environments supports a long-duration automation trend.
Valuation Framework (2026 Outlook)
| Metric | Estimate |
|---|---|
| Robots Deployed | 1,000 |
| Revenue per Robot | ~$60,000/year |
| Total ARR | ~$60 million |
| EBITDA Margin | ~30% |
| EBITDA | ~$18 million |
| EV/EBITDA Multiple | 10× |
| Implied Enterprise Value | ~$180 million |
| Current Enterprise Value | ~$36 million |
In a scenario where execution continues and fleet expansion reaches scale, the business model could support a re-rating in valuation, assuming stable macro and capital conditions.
Forward PEG Proxy Analysis
- Projected Net Income (FY 2026): ~$12–14 million
- Shares Outstanding: ~6.56 million
- Estimated EPS (2026): ~$1.83–2.13
- Forward P/E: ~$4.98 ÷ ~$2.00 ≈ 2.49
- EPS CAGR (2024–2026 est.): ~70%
- Forward PEG: 2.49 ÷ 70 ≈ 0.036
A PEG this low may indicate deep relative undervaluation compared to growth expectations, contingent on continued operational momentum and cost scaling.
Competitive Advantages
- End-to-end proprietary hardware and software stack
- Alignment with U.S. government (DoD, U.S. Air Force) and domestic manufacturing
- One of few enterprise-deployed robotics platforms in commercial security
- Subscription (RaaS) model allows for scalable and recurring revenue with improving unit economics
Financial Summary
- Cash: ~$7 million
- Debt: Negligible
- Shares Outstanding: ~6.56 million
- Insider Ownership: ~2%, with recent insider buys
- Burn Rate: Appears to have stabilized; gross margin improving
Short Interest & Float Dynamics
- Public Float: ~6.5 million shares
- Short Interest: ~12.5% of float
- Days to Cover: ~2.4
A small float and relatively high short interest may contribute to amplified price volatility in response to positive catalysts or news flow.
Analyst Coverage & Market Sentiment
- Average Analyst Target: ~$15.67 (range $9–$26) (Yahoo Finance, Fintel, MarketWatch, Barron’s)
- Fintel Consensus Target: ~$17.34 (Fintel)
- Upside Potential Implied: 185%–215%
- Analyst Ratings: Currently all “Strong Buy” or “Buy” (StockAnalysis)
- Retail Sentiment: High visibility in robotics/AI-focused forums; news events often drive price reactions
While institutional ownership remains low, increased attention from analysts or funds could contribute to broader valuation discovery.
Risks & Mitigants
| Risk | Mitigant |
|---|---|
| Pre-profit status; volatility | Emphasize milestone tracking and conservative sizing |
| Capital requirements | Margin expansion and backlog growth ease near-term pressure |
| Execution risk | Backed by multi-sector commercial and government contracts |
| Low liquidity | Requires trade patience; volatility may reward thoughtful positioning |
Conclusion
Knightscope represents a rare case study: a pre-profit robotics venture operating in the public markets with commercial traction and a potentially scalable economic model. It benefits from:
- A large, underpenetrated addressable market
- Recurring revenue via robot-as-a-service
- A proprietary technology stack with government-aligned credibility
- Favorable forward PEG dynamics (under modeled success)
- Multiple analyst targets suggesting material upside potential
While execution and capital discipline remain essential, KSCP illustrates an example of mission-driven automation with meaningful optionality. For those exploring small-cap exposure to physical AI infrastructure, it stands out as a notable case in the robotics/security intersection.
Disclaimer
This article is for informational and educational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. The author is not a registered investment advisor. All opinions are the author’s own. Readers are encouraged to do their own research and consult with a licensed financial professional before making investment decisions.
