Investment Thesis
Knightscope operates with a fundamentally broken business model evidenced by -42.1% gross margin, losing money on every dollar of revenue. With -$30.3M operating cash flow against only $20.6M in cash, the company faces severe liquidity crisis within 8 months at current burn rates, making financial distress highly probable.
Strengths
- Modest revenue growth of 4.9% year-over-year despite unprofitable operations
- Low financial leverage with Debt/Equity ratio of 0.14x and minimal debt burden
- Strong short-term liquidity with current ratio of 3.99x and $20.6M cash reserves
Risks
- Negative gross margin of -42.1% indicates structural business model failure at pricing or cost levels
- Operating cash burn of -$30.3M annually exhausts available cash in approximately 8 months
- Extreme profitability deterioration with operating margin of -299% and net margin of -298.3%
- Negative returns across all metrics (ROE -121.8%, ROA -82.0%, Interest Coverage -546.6x)
- Zero insider purchases in past 90 days suggests management lacks confidence in turnaround
Key Metrics to Watch
- Gross margin trajectory - any improvement toward positive territory would indicate potential viability
- Monthly cash burn rate relative to remaining liquidity - critical survival metric
- Revenue per unit economics and unit sales volume - assess whether revenue growth masks worsening margins
Financial Metrics
Revenue
11.3M
Net Income
-33.8M
EPS (Diluted)
$-4.00
Free Cash Flow
-31.0M
Total Assets
41.3M
Cash
20.6M
Profitability Ratios
Gross Margin
-42.1%
Operating Margin
-299.0%
Net Margin
-298.3%
ROE
-121.8%
ROA
-82.0%
FCF Margin
-273.5%
Balance Sheet & Liquidity
Current Ratio
3.99x
Quick Ratio
3.64x
Debt/Equity
0.14x
Debt/Assets
32.7%
Interest Coverage
-546.63x
Long-term Debt
4.0M
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-04-12T06:24:21.135998 |
Data as of: 2025-12-31 |
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