BIO-key International (BKYI) AI Stock Analysis

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BIO-key International

(NASDAQ:BKYI)

41Neutral

BIO-key International's overall stock score reflects significant financial challenges due to consistent negative profitability and cash flow. Despite operational improvements and strategic shifts towards higher-margin products as highlighted in the earnings call, the technical indicators suggest bearish momentum. The valuation is also hampered by a lack of profitability and dividends. The company's future growth prospects hinge on successful execution of its strategic initiatives and market expansion.

Positive Factors

Earnings

BKYI reported better-than-expected 3Q24 results with revenue of $2.1M, above the estimate.

Growth Potential

Management expects 2024 revenue to meet or exceed the $7.75M revenue achieved in 2023, indicating growth potential.

Product Innovation

BKYI recently entered the passkey authentication market with the launch of a unique password-less authentication solution.

Negative Factors

Delayed Orders

The primary reason for the revenue miss was due to a delayed $450K order that slipped into 3Q24.

Revenue Estimates

Lower 2024 and 2025 revenue and EBIT estimates based on management commentary and continued macro challenges.

BIO-key International (BKYI) vs. S&P 500 (SPY)

Market Cap

$2.34M

Dividend YieldN/A

Average Volume (3M)264.66K

Price to Earnings (P/E)―

Beta (1Y)1.11

Revenue Growth-10.64%

EPS Growth79.12%

CountryUS

Employees43

SectorIndustrials

Sector Strength70

IndustrySecurity & Protection Services

Share Statistics

EPS (TTM)-2.23

Shares Outstanding3,127,049

10 Day Avg. Volume135,078

30 Day Avg. Volume264,658

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.52

Price to Cash Flow (P/CF)-0.70

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$3.00

Price Target Upside279.75% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering0

BIO-key International Business Overview & Revenue Model

Company DescriptionBIO-key International, Inc. develops and markets fingerprint identification biometric technology and software solutions, and enterprise-ready identity access management solutions for commercial, government, and education customers in the United States and internationally. The company offers BIO-key PortalGuard and PortalGuard IDaaS solutions, a customer-controlled and neutral-by-design cloud-based identity platform that allows customers to integrate with any cloud or on-premises SaaS application, as well as windows device authentication through IAM platform. Its solutions enable its customers to secure their workforces and student populations; and make their partner networks more collaborative. In addition, it provides BIO-key VST and WEB-key products; and Civil and Large-Scale ID Infrastructure solutions that develops finger-based biometric technology. Further, it offers finger scanners for enterprise and consumer markets under SideSwipe, EcoID, and SidePass brand names. The company was formerly known as SAC Technologies and changed its name to BIO-key International, Inc. in 2002. BIO-key International, Inc. was founded in 1993 and is headquartered in Wall, New Jersey.

How the Company Makes MoneyBIO-key International makes money through the sale of its biometric hardware products, such as fingerprint scanners, and its software solutions, which include identity access management systems. The company generates revenue by licensing its software to enterprises and government agencies, offering subscription-based services for identity management, and providing support and maintenance contracts. Partnerships with technology providers and system integrators also contribute to its earnings by expanding its reach and customer base. Additionally, BIO-key engages in direct sales and collaborates with original equipment manufacturers (OEMs) to integrate its biometric technology into their solutions.

BIO-key International Financial Statement Overview

Summary

BIO-key International faces considerable financial challenges with persistent losses, declining revenues, and high leverage. Income statement issues include a negative net income and declining revenue. The balance sheet is weakened by high leverage and minimal equity. Cash flow analysis indicates operational cash burn, though there's some alignment between cash flow and earnings.

Income Statement

Neutral

The income statement shows significant challenges. The company has negative net income and EBIT, indicating profitability issues. Revenue has declined from the previous year, leading to a negative revenue growth rate of -17.56% for the TTM. Gross profit margin is low at 14.78%, and net profit margin is deeply negative, showcasing a struggle to manage costs relative to revenue.

Balance Sheet

Negative

The balance sheet is under pressure with a debt-to-equity ratio of 18.53, indicating high leverage. The equity ratio has drastically declined to 2.08%, reflecting a weakened equity position. Return on equity is negative due to losses, further signaling financial instability. The company holds minimal equity against its liabilities.

Cash Flow

Neutral

Cash flow analysis reveals negative operating and free cash flows, indicating cash burn operationally. However, the operating cash flow to net income ratio is 0.43, showing some alignment between cash flow and reported earnings. Financing activities have been necessary to cover cash shortfalls.

TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Breakdown
Income Statement		Total Revenue
6.39M	7.75M	7.02M	5.11M	2.84M	2.27M
	Gross Profit
944.77K	1.43M	4.98M	3.44M	2.04M	-193.72K
	EBIT
-9.27M	-8.83M	-9.69M	-5.00M	-4.86M	-6.56M
	EBITDA
-8.70M	-7.85M	-11.37M	-4.53M	-4.90M	-12.38M
	Net Income Common Stockholders
-9.09M	-8.52M	-10.74M	-4.57M	-13.59M	-14.65M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
487.97K	511.40K	2.64M	7.75M	17.51M	591.83K
	Total Assets
6.36M	4.52M	11.91M	17.77M	22.52M	2.50M
	Total Debt
381.65K	365.35K	2.22M	264.16K	730.47K	2.82M
	Net Debt
-106.32K	-146.05K	-414.09K	-7.49M	-16.26M	2.74M
	Total Liabilities
4.39M	3.45M	4.85M	2.19M	2.19M	4.78M
	Stockholders Equity
1.96M	1.06M	7.06M	15.58M	20.34M	-2.29M
Cash Flow		Free Cash Flow
-3.96M	-3.79M	-6.31M	-9.02M	-4.99M	-1.88M
	Operating Cash Flow
-3.93M	-3.79M	-6.23M	-8.98M	-4.95M	-1.85M
	Investing Cash Flow
-24.05K	-1.00K	-696.62K	-42.02K	-2.23M	-543.31K
	Financing Cash Flow
5.22M	1.43M	1.90M	-218.60K	24.09M	2.15M

BIO-key International Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price0.79

Price Trends

50DMA

0.94

Negative

100DMA

1.14

Negative

200DMA

1.17

Negative

Market Momentum

MACD

-0.07

Negative

RSI

47.55

Neutral

STOCH

53.76

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BKYI, the sentiment is Neutral. The current price of 0.79 is above the 20-day moving average (MA) of 0.73, below the 50-day MA of 0.94, and below the 200-day MA of 1.17, indicating a neutral trend. The MACD of -0.07 indicates Negative momentum. The RSI at 47.55 is Neutral, neither overbought nor oversold. The STOCH value of 53.76 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for BKYI.

BIO-key International Risk Analysis

BIO-key International disclosed 32 risk factors in its most recent earnings report. BIO-key International reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

BIO-key International Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	63 Neutral	$4.28B	11.33	5.43%	214.88%	4.12%	-8.65%
BKYI	41 Neutral	$2.34M	―	-185.43%	―	-10.64%	79.12%
XPON	40 Underperform	$3.00M	―	-342.64%	―	-5.96%	20.41%
BURU	35 Underperform	$7.96M	―	220.90%	―	-92.71%	39.07%
DFLI	30 Underperform	$3.78M	―	-438.89%	―	-21.35%	-155.36%

* Industrials Sector Average

Performance Comparison

BKYI

BIO-key International

0.79

-0.79

-50.00%

BURU

Nuburu

0.16

-6.76

-97.69%

AGRI

AgriFORCE Growing Systems

2.24

-12.66

-84.97%

DFLI

Dragonfly Energy Holdings Corp

0.54

-6.38

-92.20%

SMX

SMX Public Limited Company

2.09

-326.02

-99.36%

XPON

Expion360, Inc.

0.94

-227.06

-99.59%

BIO-key International Earnings Call Summary

Earnings Call Date: Mar 27, 2025 | % Change Since: -29.46% | Next Earnings Date: May 14, 2025

Earnings Call Sentiment Neutral

The earnings call revealed a strategic shift towards higher-margin products, resulting in improved gross profit and margin. Despite a decline in total revenue due to exiting low-margin services, the company is showing promising growth prospects for 2025 with increased demand for its IAM solutions and several strategic partnerships. However, the decline in hardware and service revenue presents challenges that need addressing.

Highlights

Increased Gross Profit and Margin

BIO-key's gross profit rose to $5.4 million in 2024, an 8% increase, with an adjusted gross margin of 78% compared to 64% in 2023.

License Revenue Growth

High-margin software license fee revenue increased by 20% to $5.2 million in 2024.

Reduced Cash Burn and Expenses

Operating expenses were reduced by 6% in 2024, and cash burn was trimmed by 23% to $2.9 million.

Contract Wins and Strategic Partnerships

Secured a $910,000 contract with a foreign financial services client and a significant partnership with the National Bank of Egypt.

Strong Start to 2025

Encouraging order activity and customer interest in 2025, with an emphasis on passwordless, phoneless, and tokenless IAM solutions.

Lowlights

Overall Revenue Decline

Total revenue decreased by 11% to $6.9 million in 2024 due to exiting a low-margin services agreement.

Decline in Hardware and Service Revenue

Service revenue declined to $1.1 million from $2.2 million, and hardware revenue fell from $1.2 million in 2023 to $632,000 in 2024.

Company Guidance

During BIO-key International's 2024 Fourth Quarter Conference Call, the company reported a strategic pivot that resulted in significant financial changes. They strengthened their financial position with approximately $3.8 million from a warrant exercise and reduced outstanding debt to $730,000 from $1.5 million. License fee revenue increased by 20% to $5.2 million, contributing to a gross profit rise of 8% to $5.4 million, achieving an adjusted gross margin of 78% compared to 64% in 2023. However, total revenue declined by 11% to $6.9 million due to exiting a low-margin software relationship. Operating expenses were reduced by 6%, and cash burn was trimmed by 23% to $2.9 million. The company is optimistic about 2025, citing encouraging order activity, a strong presence in international defense, and a strategic focus on core solutions like PortalGuard IAM and identity-bound biometrics. They project growth in hardware and services revenue and intend to leverage partnerships and market expansions to drive growth and profitability.

BIO-key International Corporate Events

Delistings and Listing ChangesRegulatory Filings and Compliance

BIO-key International Regains Nasdaq Compliance After Filing

Neutral

Apr 24, 2025

On April 17, 2025, BIO-key International received a notice from Nasdaq for non-compliance with a listing rule due to a delay in filing its Annual Report for 2024. The company resolved the issue by filing the report on April 23, 2025, and regained compliance with Nasdaq’s listing requirements by April 24, 2025, ensuring no impact on its stock trading.

Spark’s Take on BKYI Stock

According to Spark, TipRanks’ AI Analyst, BKYI is a Neutral.

BIO-key International’s overall stock score reflects significant financial challenges due to consistent negative profitability and cash flow. Despite operational improvements and strategic shifts towards higher-margin products as highlighted in the earnings call, the technical indicators suggest bearish momentum. The valuation is also hampered by a lack of profitability and dividends. The company’s future growth prospects hinge on successful execution of its strategic initiatives and market expansion.

To see Spark’s full report on BKYI stock, click here.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.