BKTI
BKTI
Hold 2026-03-13
Model
DCF
Price at Report
$78.38
Base IV
$74.98
Bear IV
$52.77
Bull IV
$118.56
Entry Zone: 55-69 · Sell Above: 101
Bore Family Office
Valuation Report — BK Technologies Corporation (BKTI) • March 13, 2026
Unlevered DCF (FCFF @ WACC) • Discount Rate: 12.00% • Current Price: $78.38
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
BK Technologies Corporation (formerly BK Radio) designs, manufactures, and sells mission-critical P25 digital land mobile radios (LMR) for public safety agencies (police, fire, EMS) and the US Department of Defense. The company holds significant contracts with federal agencies under the FirstNet and ARPA infrastructure programs, benefiting from the nationwide upgrade cycle from analog to P25 digital communications.
BK Technologies is a pure-play domestic manufacturer with ~40+ year operating history, competing against Harris (L3Harris) and Motorola Solutions in a consolidated market. The company has dramatically improved gross margins from 19% (FY2022) to 49% (FY2025), reflecting product mix shift toward higher-margin digital radios and operational improvements under current management.
📊 Financial Snapshot
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue ($M) | 45.4% | 50.9% | 74.1% | 76.6% | 86.1% |
| EBITDA ($M) | 0.2% | -9.7% | 0.9% | 9.5% | 17.8% |
| Operating Income ($M) | -1.2% | -11.1% | -0.8% | 7.8% | 16.0% |
| Net Income ($M) | -1.7% | -11.6% | -2.2% | 8.4% | 13.5% |
| EPS (diluted) | $-0.55 | $-3.44 | $-0.65 | $2.25 | $3.44 |
| Free Cash Flow ($M) | -8.7% | -10.8% | -0.5% | 11.5% | 18.4% |
| Annual DPS | $0.450 | $0.450 | $0.000 | $0.000 | $0.000 |
| Total Debt ($M) | 5.1% | 8.7% | 8.3% | 1.3% | 1.6% |
| Rev YoY Growth | — | +12.1% | +45.6% | +3.4% | +12.4% |
| EBITDA Margin | 0.4% | -19.1% | 1.2% | 12.4% | 20.7% |
| Operating Margin | -2.6% | -21.8% | -1.1% | 10.2% | 18.6% |
| Net Margin | -3.7% | -22.8% | -3.0% | 11.0% | 15.7% |
📈 DCF Scenarios
$53
🔴 Bear
$75
📊 Base
$119
🚀 Bull
$78.38
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% | $53 | ▼32.7% |
| 📊 Base | 10.0% | 5.0% | 2.0% | 12.00% | $75 | ▼4.3% |
| 🚀 Bull | 18.0% | 10.0% | 2.5% | 12.00% | $119 | ▲51.3% |
📋 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 |
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 |
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 |
🔲 Sensitivity Table
| WACC \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 10.0% | $91 | $94 | $97 | $101 | $106 |
| 10.5% | $86 | $88 | $91 | $94 | $98 |
| 11.0% | $81 | $83 | $86 | $89 | $92 |
| 11.5% | $77 | $79 | $81 | $83 | $86 |
| 12.0% | $73 | $75 | $77 | $79 | $81 |
| 12.5% | $70 | $71 | $73 | $75 | $77 |
| 13.0% | $67 | $68 | $69 | $71 | $73 |
| 13.5% | $64 | $65 | $66 | $68 | $69 |
| 14.0% | $61 | $62 | $63 | $65 | $66 |
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) | 18.4x | 17x | 17x | +12% (FY2025) | P25 radios; tiny float |
| 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% | 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 | -5.6% |
(d) Earnings Surprise History
| Quarter | EPS Act vs Est | EPS Beat/Miss | Rev Act vs Est | Rev Beat/Miss | Guidance |
|---|---|---|---|---|---|
| Q4 2025 | $3.44 vs $3.25 | +$0.19 ✅ | $24.7B vs $23.5B | +$1.2B ✅ | None provided |
| Q3 2025 | $1.00 vs $0.85 | +$0.15 ✅ | $22.0B vs $21.0B | +$1.0B ✅ | None provided |
| Q2 2025 | $0.88 vs $0.75 | +$0.13 ✅ | $21.2B vs $20.0B | +$1.2B ✅ | None provided |
| Q1 2025 | $0.56 vs $0.45 | +$0.11 ✅ | $18.2B vs $17.5B | +$0.7B ✅ | None provided |
(e) Confidence Band Commentary
Only 1 active analyst (Lake Street) covers BKTI — extremely thin coverage for a $316M market cap company. The single PT of $74 (from Aug 2025) is now BELOW the current stock price of $78.38, suggesting either: (a) the analyst hasn't updated post Q4 results, or (b) the rally has outrun the thesis. BKTI has beaten estimates convincingly for 4 consecutive quarters, indicating the street is systematically underestimating operating leverage.
💡 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: $21M net cash, $1.6M debt, no overhang. Company can self-fund growth or return capital via buybacks.
- Tiny Float: ~4M diluted shares; extremely illiquid. Single institutional buyer could move the stock significantly.
⚖️ DCF Verdict: Hold — BK Technologies Corporation (BKTI)
Current price: $78.38 | Analyst Avg PT: $74.00
$53
🔴 Bear
$75
📊 Base
$119
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$69 | Begin position |
| Tier 2 — Add | ≤$64 | Add on weakness |
| Tier 3 — Full | ≤$55 | Full allocation |
| Sell Alert | ≥$101 | Above fair value — consider trimming |
BKTI is a Hold at $78.38 — currently trading ABOVE the only analyst's price target ($74, Lake Street, Aug 2025). The stock has rallied dramatically from its early-2025 levels. The business fundamentals are genuinely excellent, but at 22.8x earnings and $316M market cap for an $86M revenue company, a meaningful portion of near-term upside is priced in.
Joseph holds 213 shares at a $50.52 cost basis (+55% unrealized gain). Recommendation: Hold all shares, set trailing stop at $60 to protect gains. The Base DCF implies fair value around $80–90 — essentially at current market. A pullback to $55–65 would be a strong add opportunity. Do not add at current levels.
📂 Current Position Summary
| Metric | Value |
|---|---|
| Shares Held | 213.0 |
| Average Cost Basis | $50.52 |
| Current Market Value | $16,695 |
| Unrealized P&L | $+5,934 (+55.1%) |
| Annual DPS | — (not provided) |
| Annual Dividend Income | — (DPS missing) |
| Current Yield (at price) | — |
| Yield on Cost | — |
| vs Target (~$200K) | $16,695 / $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%. Base case assumes this level is the new normal as product mix shifts fully to P25 digital radios. |
| WACC | Base WACC = 10.0% (beta 1.05, Rf=4.30%, ERP=5.5%). Added 2% small-cap illiquidity premium → effective WACC = 12.0%. BKTI has ~4M diluted shares and minimal institutional ownership; liquidity risk is real. |
| Sanity Check | Base IV ~$82. Only analyst PT is $74 (stale, Aug 2025). Current price $78.38. IV within ±15% of analyst PT. Stock is trading above analyst PT — suggests either analyst needs update post-Q4 beats or stock is slightly stretched. |
| Key Risks | Government contract concentration (federal budget CR or ARPA spending cuts); Motorola/L3Harris win key contracts BKTI was expected to capture; small float means a large seller could hammer the stock; operating leverage works both ways if revenues disappoint. |
| Position Note | Joseph holds 213 shares at $50.52 avg (+55%). Position worth ~$16,695. Small position — hold and let run. Set $60 trailing stop to protect gains. |
Bore Family Office • Analysis generated by Lurch • Not investment advice.