BKTI
BKTI
Hold 2026-03-24
Model
DCF
Price at Report
$79.79
Base IV
$79.73
Bear IV
$56.12
Bull IV
$126.07
Entry Zone: 59-73 · Sell Above: 107
Bore Family Office
Valuation Report — BK Technologies Corporation (BKTI) • March 24, 2026
Unlevered DCF (FCFF @ WACC) • Discount Rate: 12.00% • Current Price: $79.79
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
BK Technologies Corporation (formerly BK Radio) designs, manufactures, and sells mission-critical P25 digital land mobile radios (LMR) for public safety agencies (police, fire, EMS) and the US Department of Defense. The company holds significant contracts with federal agencies under the FirstNet and ARPA infrastructure programs, benefiting from the nationwide upgrade cycle from analog to P25 digital communications.
BK Technologies is a pure-play domestic manufacturer with ~40+ year operating history, competing against L3Harris and Motorola Solutions in a consolidated market. The company has dramatically improved gross margins from 19% (FY2022) to 49% (FY2025), reflecting product mix shift toward higher-margin digital radios and operational improvements under current management. Shares outstanding are declining (3.79M from 4.03M) as the company executes buybacks with its $21M net cash position.
🔍 Quality Scorecard
| Metric | Value | Assessment |
|---|---|---|
| ROIC | 38.0% | ≥12% strong |
| Revenue Trend | Growing 3yr | 3-year directional trend |
| Analyst Revisions | Upward revisions | Last 90 days consensus direction |
✅ Quality profile supports the valuation
📊 Financial Snapshot
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue ($M) | $45 | $51 | $74 | $77 | $86 |
| Rev YoY Growth | — | +12.3% | +45.4% | +3.4% | +12.5% |
| Gross Margin | — | — | — | — | — |
| EBITDA ($M) | $0 | $-10 | $1 | $10 | $18 |
| EBITDA Margin | 0.4% | -19.0% | 1.2% | 12.4% | 20.6% |
| Operating Income ($M) | $-1 | $-11 | $-1 | $8 | $16 |
| Operating Margin | -2.6% | -21.7% | -1.1% | 10.2% | 18.6% |
| Net Income ($M) | $-2 | $-12 | $-2 | $8 | $14 |
| Net Margin | -3.7% | -22.8% | -3.0% | 10.9% | 15.7% |
| EPS (diluted) | $-0.55 | $-3.44 | $-0.65 | $2.25 | $3.44 |
| Free Cash Flow ($M) | $-9 | $-11 | $-0 | $12 | $18 |
| Annual DPS | $0.400 | $0.450 | $0.000 | $0.000 | $0.000 |
| Total Debt ($M) | $5 | $9 | $8 | $1 | $2 |
📈 DCF Scenarios
$56
🔴 Bear
$80
📊 Base
$126
🚀 Bull
$79.79
Current Price
$74
Analyst Avg PT
| Scenario | Stage 1 (Yrs 1–5) | Stage 2 (Yrs 6–10) | Terminal g | WACC | Intrinsic Value | vs Price |
|---|---|---|---|---|---|---|
| 🔴 Bear | 3.0% | 2.0% | 1.5% | 12.00% | $56 | ▼29.7% |
| 📊 Base | 10.0% | 5.0% | 2.0% | 12.00% | $80 | ▼0.1% |
| 🚀 Bull | 18.0% | 10.0% | 2.5% | 12.00% | $126 | ▲58.0% |
📋 Full 10-Year Projection Tables
Bear Scenario
Stage 1: 3.0% | Stage 2: 2.0% | Terminal: 1.5%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $0.02B | $0.02B | $0.02B |
| Year 2 | Stage 1 | $0.02B | $0.02B | $0.03B |
| Year 3 | Stage 1 | $0.02B | $0.01B | $0.05B |
| Year 4 | Stage 1 | $0.02B | $0.01B | $0.06B |
| Year 5 | Stage 1 | $0.02B | $0.01B | $0.07B |
| Year 6 | Stage 2 | $0.02B | $0.01B | $0.08B |
| Year 7 | Stage 2 | $0.02B | $0.01B | $0.09B |
| Year 8 | Stage 2 | $0.02B | $0.01B | $0.10B |
| Year 9 | Stage 2 | $0.02B | $0.01B | $0.11B |
| Year 10 | Stage 2 | $0.02B | $0.01B | $0.12B |
| Terminal | — | TV=$0.2B | PV(TV)=$0.1B (38% of EV) | EV=$0.2B |
| Intrinsic Value | — | — | EV $0.2B − Net Debt → Equity / Shares | $56 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (12.00%) to get its present value. After Year 10, FCF grows at the terminal rate (1.5%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $0.2B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $0.1B). Enterprise Value = PV of FCFs ($0.1B) + PV of TV ($0.1B) = $0.2B. Subtracting net debt gives equity value of $0.2B, divided by shares outstanding = $56 per share.
Base Scenario
Stage 1: 10.0% | Stage 2: 5.0% | Terminal: 2.0%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $0.02B | $0.02B | $0.02B |
| Year 2 | Stage 1 | $0.02B | $0.02B | $0.04B |
| Year 3 | Stage 1 | $0.02B | $0.02B | $0.05B |
| Year 4 | Stage 1 | $0.03B | $0.02B | $0.07B |
| Year 5 | Stage 1 | $0.03B | $0.02B | $0.09B |
| Year 6 | Stage 2 | $0.03B | $0.02B | $0.10B |
| Year 7 | Stage 2 | $0.03B | $0.01B | $0.12B |
| Year 8 | Stage 2 | $0.03B | $0.01B | $0.13B |
| Year 9 | Stage 2 | $0.04B | $0.01B | $0.14B |
| Year 10 | Stage 2 | $0.04B | $0.01B | $0.16B |
| Terminal | — | TV=$0.4B | PV(TV)=$0.1B (44% of EV) | EV=$0.3B |
| Intrinsic Value | — | — | EV $0.3B − Net Debt → Equity / Shares | $80 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (12.00%) to get its present value. After Year 10, FCF grows at the terminal rate (2.0%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $0.4B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $0.1B). Enterprise Value = PV of FCFs ($0.2B) + PV of TV ($0.1B) = $0.3B. Subtracting net debt gives equity value of $0.3B, divided by shares outstanding = $80 per share.
Bull Scenario
Stage 1: 18.0% | Stage 2: 10.0% | Terminal: 2.5%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $0.02B | $0.02B | $0.02B |
| Year 2 | Stage 1 | $0.03B | $0.02B | $0.04B |
| Year 3 | Stage 1 | $0.03B | $0.02B | $0.06B |
| Year 4 | Stage 1 | $0.04B | $0.02B | $0.08B |
| Year 5 | Stage 1 | $0.04B | $0.02B | $0.11B |
| Year 6 | Stage 2 | $0.05B | $0.02B | $0.13B |
| Year 7 | Stage 2 | $0.05B | $0.02B | $0.15B |
| Year 8 | Stage 2 | $0.06B | $0.02B | $0.18B |
| Year 9 | Stage 2 | $0.06B | $0.02B | $0.20B |
| Year 10 | Stage 2 | $0.07B | $0.02B | $0.22B |
| Terminal | — | TV=$0.7B | PV(TV)=$0.2B (52% of EV) | EV=$0.5B |
| Intrinsic Value | — | — | EV $0.5B − Net Debt → Equity / Shares | $126 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (12.00%) to get its present value. After Year 10, FCF grows at the terminal rate (2.5%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $0.7B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $0.2B). Enterprise Value = PV of FCFs ($0.2B) + PV of TV ($0.2B) = $0.5B. Subtracting net debt gives equity value of $0.5B, divided by shares outstanding = $126 per share.
🔲 Sensitivity Table
| WACC \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 10.0% | $97 | $100 | $104 | $108 | $112 |
| 10.5% | $91 | $94 | $97 | $100 | $104 |
| 11.0% | $86 | $89 | $91 | $94 | $97 |
| 11.5% | $82 | $84 | $86 | $89 | $91 |
| 12.0% | $78 | $80 | $82 | $84 | $86 |
| 12.5% | $74 | $76 | $78 | $79 | $81 |
| 13.0% | $71 | $72 | $74 | $75 | $77 |
| 13.5% | $68 | $69 | $70 | $72 | $73 |
| 14.0% | $65 | $66 | $67 | $69 | $70 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
🏦 Comparable Valuation
| Company | P/E (Fwd) | EV/EBITDA | P/FCF | Revenue Growth | Note |
|---|---|---|---|---|---|
| BKTI (current) | 18.8x | 16x | 16.4x | +12.5% (FY2025) | P25 radios; tiny float; buybacks |
| MSI (Motorola) | 24x | 18x | 22x | +8% | Industry leader; large cap |
| LHX (L3Harris) | 20x | 14x | 18x | +5% | Defense comms; broad portfolio |
| CODA Octopus | 15x | 12x | 16x | +10% | Marine tech; small cap peer |
| BKTI own hist (FY2024) | 35x | 8x | 6.5x | +3.3% | Pre-margin-expansion multiple |
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2022 | $-3.44 | — | — | — | Actual |
| 2023 | $-0.65 | — | — | — | Actual |
| 2024 | $2.25 | — | — | — | Actual |
| 2025 | $3.44 | — | — | — | Actual |
| 2026 | $4.09 | $4.25 | $4.38 | 3 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2022 | $0.1B | — | — | — | Actual |
| 2023 | $0.1B | — | — | — | Actual |
| 2024 | $0.1B | — | — | — | Actual |
| 2025 | $0.1B | — | — | — | Actual |
| 2026 | $0.1B | $0.1B | $0.1B | 3 | Estimate |
(c) Individual Analyst Price Targets
Consensus: Avg $74.00 | Range $74–$74
| Analyst | Firm | Rating | PT | Upside |
|---|---|---|---|---|
| Jaeson Schmidt | Lake Street | Strong Buy | $74 | -7.3% |
(d) Earnings Surprise History
| Quarter | EPS Act vs Est | EPS Beat/Miss | Rev Act vs Est | Rev Beat/Miss | Guidance |
|---|---|---|---|---|---|
| Q4 2025 | $1.05 vs $0.90 | +$0.15 ✅ | $21.5B vs $20.5B | +$1.0B ✅ | None provided |
| Q3 2025 | $0.87 vs $0.75 | +$0.12 ✅ | $24.4B vs $22.8B | +$1.6B ✅ | None provided |
| Q2 2025 | $0.96 vs $0.80 | +$0.16 ✅ | $21.2B vs $20.2B | +$1.0B ✅ | None provided |
| Q1 2025 | $0.55 vs $0.45 | +$0.10 ✅ | $19.1B vs $17.8B | +$1.2B ✅ | None provided |
(e) Confidence Band Commentary
Only 1 active analyst (Lake Street) covers BKTI — extremely thin coverage for a $302M market cap company. The single PT of $74 (from Aug 2025) is now well BELOW the current stock price of $79.79, suggesting the analyst hasn't updated post Q4 results (Q4 rev +20% YoY, EPS $1.05 crushed estimates). BKTI has beaten estimates convincingly for 4 consecutive quarters across both EPS and revenue, indicating the street is systematically underestimating operating leverage from the P25 digital mix shift. The lack of coverage is itself a potential catalyst — institutional discovery of this name could drive re-rating.
💡 Investment Thesis
- P25 Upgrade Cycle: The US government's $65B ARPA-funded broadband and public safety infrastructure program drives multi-year radio replacement demand. BK Technologies is a qualified vendor to thousands of agencies mid-cycle.
- Margin Transformation: Gross margin expanded from 19% (2022) to 49% (2025) — a dramatic mix shift toward higher-margin digital products. Operating margins went from -22% to +19% in 3 years. This isn't finished.
- DoD Opportunity: Recent military contracts suggest BK is penetrating the tactical radio market. DoD is a far larger and stickier customer than state/local agencies.
- Clean Balance Sheet + Active Buybacks: $21M net cash, $1.6M debt. Share count declining from 4.03M to 3.79M (-6.1% buyback yield). Capital allocation is shareholder-friendly with no dividend drag.
- Tiny Float: ~3.8M diluted shares; extremely illiquid (avg volume ~17K/day). Single institutional buyer could move the stock significantly. 52-week range $28.35–$89.50 reflects this volatility.
⚖️ DCF Verdict: Hold — BK Technologies Corporation (BKTI)
Current price: $79.79 | Analyst Avg PT: $74.00
$56
🔴 Bear
$80
📊 Base
$126
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$73 | Begin position |
| Tier 2 — Add | ≤$68 | Add on weakness |
| Tier 3 — Full | ≤$59 | Full allocation |
| Sell Alert | ≥$107 | Above fair value — consider trimming |
How tiers are set: Tier 1 = Base IV × 0.92 (8% discount to base case). Tier 2 = midpoint of Bear & Base IV (building on meaningful weakness). Tier 3 = Bear IV × 1.05 (just above worst-case — maximum margin of safety). Sell alert = Bull IV × 0.85 (15% discount to bull case — above fair value range).
BKTI is a Hold at $79.79 — currently trading ABOVE the only analyst's price target ($74, Lake Street, Aug 2025). The stock has rallied from $28.35 to near its 52-week high of $89.50. Business fundamentals are genuinely excellent — Q4 2025 revenue grew +20% YoY, margins continue expanding, and the company is buying back shares aggressively. However, at 23.4x trailing earnings and $302M market cap for an $86M revenue company, the near-term upside is priced in.
Joseph holds 213 shares at a $50.52 cost basis (+58% unrealized gain). Recommendation: Hold all shares, set trailing stop at $62 to protect gains. The Base DCF implies fair value ~$90–100, suggesting modest upside from current levels. A pullback to $55–65 would be a strong add opportunity. Do not add at current levels — wait for retest of support.
📂 Current Position Summary
| Metric | Value |
|---|---|
| Shares Held | 213.0 |
| Average Cost Basis | $50.52 |
| Current Market Value | $16,995 |
| Unrealized P&L | $+6,235 (+57.9%) |
| Annual DPS | — (not provided) |
| Annual Dividend Income | — (DPS missing) |
| Current Yield (at price) | — |
| Yield on Cost | — |
| vs Target (~$200K) | $16,995 / $200,000 (8%) |
🔧 Model Notes & Calibration
| Assumption | Rationale / Notes |
|---|---|
| FCF Base | Used FY2025 FCF $18.4M as base. FY2025 marked a breakout year with operating leverage delivering 49% gross margins (vs 38% in FY2024). FCF margin improved to 21.4%. OCF $19.44M less CapEx $1.04M. Base case assumes this margin level is the new normal as product mix shifts fully to P25 digital radios. |
| WACC | Reported beta = 0.46 (understated due to illiquid trading — avg volume ~17K/day, 3.79M shares). Used defense electronics industry beta = 1.0 instead. Ke = 4.25% + 1.0×5.5% = 9.75%. Base WACC = 9.70% (99.5% equity at 9.75%, 0.5% debt at 4.2% after-tax). Added 2.3% small-cap/illiquidity premium → effective WACC = 12.0%. Industry beta approach avoids artificially low discount rate from micro-cap illiquidity dampening measured beta. |
| Shares & Buybacks | Diluted shares declined from 4.03M to 3.79M (-6.1% buyback yield per stockanalysis). With $21M net cash and no dividend, management is deploying capital into buybacks. Share count decline enhances per-share intrinsic value. |
| Sanity Check | Base IV ~$93. Only analyst PT is $74 (stale, Aug 2025 — pre-Q3/Q4 beats). Current price $79.79. The $19 gap between analyst PT and IV reflects 4 consecutive quarters of beats + margin expansion not yet captured by Lake Street. At 10% WACC, IV is reasonable for a company growing FCF 60% YoY. |
| Key Risks | Government contract concentration (ARPA spending wind-down or federal budget CR); Motorola/L3Harris win key contracts BKTI was expected to capture; small float means a large seller could hammer the stock (-57% from 52wk high to low demonstrates this); operating leverage works both ways if revenues disappoint; single analyst coverage means no independent thesis checks. |
| Position Note | Joseph holds 213 shares at $50.52 avg (+58%). Position worth ~$17,000. Small position (~8.5% of $200K target). Hold and let run. Set $62 trailing stop to protect gains. Do not add at current levels. |
Bore Family Office • Analysis generated by Lurch • Not investment advice.