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Preview
Evolv Technologies (EVLV) is the current leader in AI-based security screening systems deployed to >1,000 customers nationwide.
The company has had a bumpy past, having gone public through a SPAC in 2021, accounting restatements in late 2024/early 2025, reorganization shakeups, and an inquiry from the FTC.
All of that seems to be in the past, and key hires for the CEO and CFO positions seem to be getting the company back on track and earning record revenue.
Recent Q3’25 led to the stock selling off on what was presumed to be changes of ARR accounting practices going forward and concerns about ARR growth into 2026 (+20% y/y).
We think these worries are an overreaction to what is a growing, high-margin SaaS business that is benefitting from massive tailwinds → mass shootings.
Management hinted at 2026 revenue guidance of between $160 million and $165 million. We think that with commentary given on the recent earnings call, management might be underpromising on guide to get a beat and raise → wouldn’t be the first time.
Other positive momentum in Q4 PR announcements from customers signing up to incorporate or pilot the EVLV systems seems to be gaining traction.
Insider buying for the first time in over a year from four separate insiders is a nice plus we like to see after the recent sell-off.
The company has recently inflected positive on an adjusted EBITDA basis and is looking to become FCF breakeven as early as Q4’25 → net cash position of ~$25 million with recently issued 5-year debt priced at SOFR + 5.25%.
We think that should the company beat guidance and continue to prove its model to various customers across the country and the world, EVLV could double its share price from here without much multiple uplift.
Disclaimer: We are long Evolv Technologies (EVLV).
With that, let’s get started.
Background Context
When we published part 1 (free) of this 2-part series, we introduced why “fear,” when it came to investing, and just in general, is the biggest motivator for human reaction. Fear keeps people in check. Keeps them worried. Keeps them on edge. It can also make them do things that they otherwise wouldn’t normally do (ex, bravery, over-plan, etc).
In the above-linked post, we highlighted why fear was the driving force for our investment in Owlet (OWLT), an FDA-approved medical device company that sells wearables to help new parents monitor their newborns from potentially dying in their sleep. The stock is up >261% since we first pitched it.
A very worst-case scenario with permanent consequences, which is why, as you can imagine, it made for a really strong case to purchase the product out of fear.
Like with OWLT, we stumbled upon another company that is capitalizing on a similar fear, while doing its best to give everyday Americans more peace of mind in their day-to-day lives.
It’s no secret that the U.S. has a gun problem. We say this as gun owners. In 2025 alone, there were >400 mass shootings in the U.S. (408 to be exact).
And, while mass shootings can technically take place anywhere, the unfortunate reality is that many do happen on school grounds. The number of school-related mass shootings over just the last 6 years (2020 - 2025) has nearly surpassed all school-related mass shootings since 1966 (1,602 vs 1,621).
Adding to the alarming stat above, the average from 2020 - 2025 on an annual basis is up ~8.9x the annual average since 1966 (267 vs 30).
But we’re not here to talk about the politics of the issue or what we think should be done about it. No. We’re here to talk about who we think is going to win in this environment that is continuously becoming more dangerous every year and shows no signs of slowing down.
Many have likened this company’s prospects to those of an early Axon Enterprise (AXON), whose signature taser product (amongst others) helped lead its stock price on an epic run over the last 5 years.
This company is called Evolv Technologies (EVLV), and they are at the forefront of AI-enabled screening systems for venues like schools, concerts, government buildings, and other areas with a lot of foot traffic that could yield modern threats.
The stock is sharply off its recent 52-week high, and like our other investment in Owlet (OWLT), we think the company has the worst behind it and is ripe to continue capitalizing on what seems to be a further deteriorating societal norm.
The Opportunity Infront of Us
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