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BIO-key International
(NASDAQ:BKYI)
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Rating:48Neutral
Price Target:
$2.50
▼(-15.54% Downside)
Action:Reiterated
Date:10/02/26
The score is held back primarily by weak financial performance—ongoing losses and substantial negative operating/free cash flow outweigh strong gross margins and low leverage. Technical signals are also bearish with the stock trading below major moving averages and a negative MACD. Offsetting these are a more constructive earnings-call outlook (improving losses, high margins, better liquidity, and stated H2 profitability target), but execution and timing risks remain.
Positive Factors
High-margin license growth
Rapid license-fee growth is improving BIO-key’s revenue mix toward software, which carries greater scalability and recurring potential than hardware or services. This mix shift also supported materially higher gross margins, strengthening the company’s ability to convert future growth into operating leverage.
Negative Factors
Persistent unprofitability
Despite year-over-year improvement, BIO-key remains materially unprofitable, with operating and net losses consuming a large portion of revenue. Until the company reaches sustained profitability, continued growth may not translate into durable earnings and management must maintain cost discipline while scaling operations.
Read all positive and negative factors
Positive Factors
Negative Factors
High-margin license growth
Rapid license-fee growth is improving BIO-key’s revenue mix toward software, which carries greater scalability and recurring potential than hardware or services. This mix shift also supported materially higher gross margins, strengthening the company’s ability to convert future growth into operating leverage.
Read all positive factors
BIO-key International (BKYI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.05M
Dividend YieldN/A
Average Volume (3M)5.82M
Price to Earnings (P/E)―
Beta (1Y)0.63
Revenue Growth-0.79%
EPS Growth67.82%
CountryUS
Employees42
SectorIndustrials
Sector Strength72
IndustryInformation Technology Services
Share Statistics
EPS (TTM)-4.07
Shares Outstanding1,436,344
10 Day Avg. Volume17,424,775
30 Day Avg. Volume5,820,134
Financial Highlights & Ratios
PEG Ratio0.01
Price to Book (P/B)0.47
Price to Sales (P/S)0.59
P/FCF Ratio-0.77
Enterprise Value/Market Cap1.37
Enterprise Value/Revenue0.61
Enterprise Value/Gross Profit0.74
Enterprise Value/Ebitda-1.39
Forecast
1Y Price Target
$20.00Price Target Upside575.68% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)-1.62
Revenue Forecast (FY)$9.00M
BIO-key International Business Overview & Revenue Model
Company Description
BIO-key International, Inc. develops and markets fingerprint identification biometric technology and software solutions, and enterprise-ready identity access management solutions in the United States and internationally. It offers BIO-key PortalGu...
How the Company Makes Money
BIO-key makes money primarily by selling its biometric identity and access management offerings as software and related services. Key revenue streams typically include: (1) Software licensing and subscriptions: revenue from licensing or subscribin...
BIO-key International Earnings Call Summary
Earnings Call Date:Aug 13, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 16, 2026
Earnings Call Sentiment Positive
The call conveyed meaningful operational and financial progress: solid revenue growth (13% Q2, 23% H1), a large shift toward higher-margin license revenue (+53%), a step-change in gross margin (from 73% to 87%), improved net losses (51% Q2 improvement) and stronger liquidity (pro forma cash > $4.5M). Management acknowledged a missed near-term expectation driven by a delayed hardware shipment and noted timing uncertainty on larger international projects. The company highlighted expanding EMEA and Middle East momentum, new partnerships, regulatory/compliance milestones (NASD AQ regain) and product advances (PortalGuard 7.0), and reiterated a target of H2 profitability. On balance, the positive operational trends, margin expansion, cash raise and customer wins materially outweigh the timing and execution risks disclosed during the call.Positive Updates
Quarterly Revenue Growth
Q2 FY26 total revenue increased 13% to $1.92M from $1.70M in Q2 FY25; first half revenue grew 23% year-over-year, driven primarily by license fee growth.
Negative Updates
Delayed Large Hardware Shipment Impact
A large hardware order shifted out of Q2 into H2, cited as the primary reason results missed internal expectations despite demand—constrains near-term revenue recognition and pushed expected profitability timing into later quarters.
Read all updates
Q2-2026 Updates
Positive
Negative
Quarterly Revenue Growth
Q2 FY26 total revenue increased 13% to $1.92M from $1.70M in Q2 FY25; first half revenue grew 23% year-over-year, driven primarily by license fee growth.
Read all positive updates
Company Guidance
Management guided to continued revenue growth and is targeting profitability in the second half of 2026, noting a delayed hardware shipment (expected in H2, possibly Q3 or split into Q3/Q4) as the primary reason Q2 fell short of prior expectations. Key metrics cited: Q2 revenue $1.92M (+13% YoY) and H1 revenue +23% YoY; Q2 gross profit $1.7M (+36%) with gross margin 87% (vs. 73% a year ago) driven by license mix (license fees +53% to $1.2M; hardware -19% to $460K; services -28% to $131K); Q2 net loss $577K ($0.56/shr), a 51% improvement, and H1 net loss $782K ($0.75/shr), a 59% improvement. Balance sheet and liquidity actions underpin the outlook: 1-for-10 reverse split (regained NASDAQ compliance), June 30 cash $1.4M (current assets $3.8M; AR $1.7M; inventory $176K; stockholders’ equity $4.3M), post-quarter cash >$4.5M after a $2.5M warrant transaction (≈5% fee), and a $350K note reduction to $325K; management reiterated software gross margins near the mid-80s% (blended ~75%+).BIO-key International Financial Statement Overview
Summary
Income Statement
18
Very Negative
Balance Sheet
62
Positive
Cash Flow
16
Very Negative
| Breakdown | TTM | Mar 2026 | Dec 2024 | Dec 2023 | Mar 2023 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 6.86M | 6.10M | 6.93M | 7.75M | 7.02M | 5.11M |
| Gross Profit | 5.60M | 4.72M | 5.64M | 1.43M | 4.58M | 3.44M |
| EBITDA | -3.00M | -3.88M | -3.55M | -7.85M | -11.37M | -4.53M |
| Net Income | -3.43M | -4.59M | -4.30M | -8.52M | -11.91M | -5.07M |
Balance Sheet | ||||||
| Total Assets | 7.48M | 10.87M | 8.62M | 4.52M | 11.34M | 17.77M |
| Cash, Cash Equivalents and Short-Term Investments | 1.38M | 2.69M | 437.60K | 511.40K | 2.64M | 7.75M |
| Total Debt | 149.73K | 703.63K | 1.78M | 365.35K | 3.24M | 264.16K |
| Total Liabilities | 3.15M | 3.20M | 4.84M | 3.45M | 6.04M | 2.15M |
| Stockholders Equity | 4.33M | 7.67M | 3.77M | 1.06M | 5.30M | 15.62M |
Cash Flow | ||||||
| Free Cash Flow | -4.16M | -4.67M | -2.93M | -3.79M | -6.31M | -9.02M |
| Operating Cash Flow | -4.15M | -4.66M | -2.91M | -3.79M | -6.23M | -8.98M |
| Investing Cash Flow | -5.96K | -12.01K | -13.05K | -1.00K | -696.62K | -42.02K |
| Financing Cash Flow | 3.39M | 6.91M | 2.83M | 1.43M | 1.90M | -218.60K |
BIO-key International Technical Analysis
Negative
2.96
Price Trends
3.10
Negative
3.78
Negative
4.90
Negative
Market Momentum
-0.25
Negative
38.93
Neutral
15.95
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BKYI, the sentiment is Negative. The current price of 2.96 is above the 20-day moving average (MA) of 2.44, below the 50-day MA of 3.10, and below the 200-day MA of 4.90, indicating a bearish trend. The MACD of -0.25 indicates Negative momentum. The RSI at 38.93 is Neutral, neither overbought nor oversold. The STOCH value of 15.95 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BKYI.
BIO-key International Risk Analysis
BIO-key International disclosed 34 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
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $13.59B | 25.33 | 12.68% | ― | 10.89% | 7.95% | |
75 Outperform | $14.78B | 10.89 | 27.55% | 1.46% | 3.41% | 1.68% | |
70 Outperform | $5.25B | 14.51 | 25.89% | 1.18% | -0.78% | 3.90% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
60 Neutral | $313.15M | -19.95 | -15.53% | ― | 65.93% | 71.75% | |
48 Neutral | $3.05M | -0.52 | -53.82% | ― | -0.79% | 67.82% | |
47 Neutral | $166.25M | -0.39 | 134.79% | ― | -0.61% | -405.05% |
* Industrials Sector Average
BKYI
BIO-key International
1.93
-5.82
-75.10%
CACI
Caci International
624.19
95.19
17.99%
SAIC
Science Applications
126.90
25.52
25.17%
UIS
Unisys
2.32
-1.57
-40.36%
LDOS
Leidos Holdings
119.45
-76.32
-38.99%
TLS
Telos
4.43
-2.69
-37.78%
BIO-key International Corporate Events
Business Operations and StrategyPrivate Placements and Financing
BIO-key International Converts Debt to Equity, Note Repaid
Positive
Oct 2, 2026
On September 29, 2026, BIO-key International, Inc. entered into four Exchange Agreements with Streeterville Capital, LLC, its lender under a secured promissory note originally issued on September 30, 2025 for $1.13 million. The company partitioned...
Private Placements and FinancingShareholder Meetings
BIO-key adjourns annual meeting over warrant share vote
Neutral
Sep 8, 2026
On September 3, 2026, BIO-key International convened its 2026 Annual Meeting of Stockholders, where shareholders were asked to vote on four proposals, including approval of the potential issuance of up to 1,236,668 shares of common stock tied to w...
Business Operations and StrategyPrivate Placements and Financing
BIO-key International Enters Warrant Exercise Capital Agreement
Positive
Aug 13, 2026
On August 10, 2026, BIO-key International, Inc. signed a warrant exercise agreement with an existing institutional investor to induce the exercise of 618,334 existing warrants by cutting the exercise price from $10.20 to $4.06 per share. In return...
Business Operations and StrategyDelistings and Listing ChangesFinancial DisclosuresRegulatory Filings and Compliance
BIO-key International Trading Reinstated on Nasdaq Capital Market
Positive
Jul 7, 2026
BIO-key International, Inc., a Nasdaq-listed cybersecurity firm specializing in biometric-centric identity and access management software, reported that it has developed a growing stream of recurring revenue and maintains a solid financial positio...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.