Bio Key International Inc (NASDAQ: BKYI)

Sector: Industrials Industry: Security & Protection Services CIK: 0001019034
Market Cap 2.62 Mn
P/B 0.43
P/E -0.62
P/S 0.41
ROIC (Qtr) -51.81
Div Yield % 0.00
Rev 1y % (Qtr) -27.75
Total Debt (Qtr) 1.46 Mn
Debt/Equity (Qtr) 0.24
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About

BIO-key International Inc. (NASDAQ: BKYI), a prominent player in the identity and access management (IAM) industry, is dedicated to providing secure, streamlined, and passwordless access for various entities. The company's solutions cater to organizations, customers, citizens, and students seeking secure access to online services, workstations, or mobile applications without relying on tokens or phones. BIO-key specializes in offering a comprehensive IAM platform that integrates seamlessly with cloud or on-premise SaaS applications, services, or...

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Investment thesis

Bull case

  • Healthy cash reserves of 2.04M provide 4.70x coverage of short-term debt 434471, demonstrating strong liquidity position and minimal refinancing risk.
  • Robust free cash flow of (3.35M) exceeds capital expenditure of (2627) by 1275.23x, indicating strong organic growth funding capability.
  • Strong tangible asset base of 8.89M provides 6.08x coverage of total debt 1.46M, indicating robust asset backing and low credit risk.
  • Tangible assets of 8.89M provide exceptional 12.10x coverage of deferred revenue 734773, showing strong service capability backing.
  • Operating cash flow of (3.35M) fully covers other non-current liabilities (659627) by 5.08x, showing strong long-term stability.

Bear case

  • Operating cash flow of (3.35M) barely covers its investment activities of 2627, with a coverage ratio of -1276.23, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of 2627 provide weak support for R&D spending of 2.58M, which is 0x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of (3.35M) provides insufficient coverage of deferred revenue obligations of 734773, which is -4.56x, raising concerns about future service delivery capabilities.
  • The company's operating cash flow of (3.35M) shows concerning coverage of stock compensation expenses of 197623, with a -16.96 ratio indicating potential earnings quality issues.
  • High receivables of 959503 relative to inventory of 394176 (2.43 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.

Geographical Breakdown of Revenue (2024)

Geographical Breakdown of Revenue (2024)

Peer comparison

Companies in the Security & Protection Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 ALLE Allegion plc 14.00 Bn 21.75 3.44 1.98 Bn
2 MSA MSA Safety Inc 7.99 Bn 374.33 5.71 0.63 Bn
3 BCO Brinks Co 6.24 Bn 112.89 1.74 4.32 Bn
4 BRC Brady Corp 4.99 Bn 38.51 4.29 0.18 Bn
5 ADT ADT Inc. 4.95 Bn -9.23 1.68 7.81 Bn
6 CXW CoreCivic, Inc. 2.04 Bn 18.69 0.98 1.04 Bn
7 GEO Geo Group Inc 2.02 Bn 8.48 0.80 1.63 Bn
8 NSSC Napco Security Technologies, Inc 1.57 Bn 33.18 8.19 0.01 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.10 1.53
EV to Cash from Ops. EV/CFO -0.29 15.25
EV to Debt EV to Debt 0.67 44.60
EV to EBIT EV/EBIT -0.24 8.47
EV to EBITDA EV/EBITDA -0.28 14.35
EV to Free Cash Flow [EV/FCF] EV/FCF -0.29 28.03
EV to Market Cap EV to Market Cap 0.37 0.95
EV to Revenue EV/Rev 0.15 2.53
Price to Book Value [P/B] P/B 0.43 3.48
Price to Earnings [P/E] P/E -0.62 32.21
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 106.48
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 25.28
Dividend per Basic Share Div per Share (Qtr) 0.00 0.36
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 7.91
Interest Coverage Int. cover (Qtr) -29.19 -11.72
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 110.92 -7.19
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 13.25 23.04
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -3.73
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 19.83 35.26
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 31.22 87.34
EBIT Growth (1y) % EBIT 1y % (Qtr) 23.41 29.11
EBT Growth (1y) % EBT 1y % (Qtr) 23.17 41.98
EPS Growth (1y) % EPS 1y % (Qtr) 85.15 37.27
FCF Growth (1y) % FCF 1y % (Qtr) 15.30 -41.16
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 13.98 7.42
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.62 0.71
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.05
Cash Ratio Cash Ratio (Qtr) 0.69 1.61
Current Ratio Curr Ratio (Qtr) 1.26 3.37
Debt to Equity Ratio Debt/Equity (Qtr) 0.24 1.13
Interest Cover Ratio Int Coverage (Qtr) -29.19 -11.72
Times Interest Earned Times Interest Earned (Qtr) -29.19 -11.72
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -58.30 -5.57
EBIT Margin % EBIT Margin % (Qtr) -65.46 -15.45
EBT Margin % EBT Margin % (Qtr) -67.71 -14.45
Gross Margin % Gross Margin % (Qtr) 78.40 38.13
Net Profit Margin % Net Margin % (Qtr) -67.30 -16.17