| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 43.13 | 667 |
| Intrinsic value (DCF) | 4.62 | -18 |
| Graham-Dodd Method | n/a | |
| Graham Formula | n/a |
Evolv Technologies Holdings, Inc. (NASDAQ: EVLV) is a pioneering force in AI-driven touchless security screening solutions, revolutionizing threat detection in high-traffic environments. Headquartered in Waltham, Massachusetts, Evolv specializes in advanced screening systems like Evolv Express, which identifies firearms, explosives, and tactical knives as individuals walk through at normal speeds—eliminating traditional bottlenecks. The company's proprietary AI platform, combined with Evolv Insights analytics and Evolv Edge for non-metallic threat detection, positions it as a leader in the security and protection services sector. Serving venues such as stadiums, schools, and corporate campuses, Evolv addresses growing global demand for seamless yet robust security infrastructure. With increasing concerns over mass violence and evolving threats, Evolv's technology offers a critical advantage in the $50B+ physical security market. The company's asset-light SaaS model, recurring revenue streams, and AI-powered differentiation make it a compelling player in the Industrials sector's security technology niche.
Evolv Technologies presents a high-growth opportunity in the AI security space, with its disruptive touchless screening technology addressing a clear market need for efficient threat detection. The company's 2024 revenue of $103.9M reflects strong adoption, though negative EPS (-$0.34) and operating cash flow (-$30.9M) highlight ongoing investment needs. Key attractions include its first-mover advantage in AI screening, sticky customer base (80%+ recurring revenue), and expanding TAM in education and commercial sectors. Risks include intense competition from legacy security firms, high R&D costs (20%+ of revenue), and dependence on AI accuracy—any high-profile failure could damage credibility. With $37M cash and $14.5M debt, liquidity appears adequate for 12-18 months, but further dilution may be needed. The stock's high beta (1.61) suggests volatility, making it suitable for risk-tolerant investors bullish on AI-driven physical security adoption.
Evolv Technologies competes in the AI security screening segment through three key advantages: 1) Proprietary AI algorithms trained on millions of real-world scans enable superior detection accuracy (99%+ firearms) with minimal false alarms, 2) Patented touchless throughput (up to 3,600 people/hour vs. 300-500 for metal detectors) creates operational efficiencies for venues, and 3) SaaS-based analytics (Evolv Insights) drives recurring revenue and customer stickiness. However, the company faces challenges from entrenched competitors like Garrett Metal Detectors in cost-sensitive markets and emerging AI rivals such as Athena Security. Evolv's focus on mid-market venues (schools, arenas) avoids direct conflict with government-focused giants like Leidos but limits near-term TAM. Its technology lead (150+ patents) provides a moat, but sales cycles remain long (6-9 months) due to budget constraints in education sector. The lack of integrated facial recognition—a feature offered by Chinese competitors—could become a competitive weakness as 'smart security' demand grows. Pricing at ~50% premium to traditional systems may hinder mass adoption until ROI case strengthens. Partnerships with Microsoft (Azure AI) and Motorola provide credibility but dependence on third-party hardware suppliers creates supply chain risks.