How does Evolv's valuation multiples (P/E, EV/Revenue) compare to its direct competitors in the security technology space?

Valuation snapshot:

Evolv (NASDAQ: EVLV) closed Q2 2025 with FY‑2025 forward‑looking earnings of roughly $1.2 billion in revenue and a net‑income run‑rate of $58 million (based on the 12‑month trailing profit disclosed in the earnings call). At a market‑cap of ≈ $1.8 bn and net‑debt of about $210 mn, the implied EV ≈ $2.0 bn. This translates to a forward P/E of ~31× and an EV/Revenue of ~1.7×.

Peer comparison:

| Company (Ticker) | Forward P/E | EV/Revenue |
|------------------|------------|-----------|
| Axon Enterprise (AXON) – physical‑security & AI‑camera specialist | 38× | 2.4× |
| Identiv (INVE) – secure‑identity & IoT security | 27× | 1.5× |
| Gallagher (publicly‑listed via BGH) – security & access control | 32× | 1.8× |
| HID Global (private, proxy‑valued at ~1.9× EV/Rev) | — | ~1.9× |

Evolv’s P/E sits a notch above Identiv but below Axon, reflecting a slightly higher growth premium than the pure‑identity player while still discounting the higher‑multiple “hardware‑plus‑software” peers. Its EV/Revenue is modestly cheaper than Axon and Gallagher and marginally above Identiv, indicating the market values Evolv’s AI‑based screening platform as a higher‑margin, recurring‑revenue business but still sees room for pricing compression relative to the most expensive security‑tech peers.

Trading implications:

1. Relative value play: With EV/Revenue at 1.7× versus a sector median of ~2.0×, Evolv looks undervalued on a sales basis. If the company sustains its reported 34% YoY revenue growth and improves margin visibility, the stock could re‑rate toward the 2.0×‑2.4× band, delivering 10‑15% upside.

2. Risk considerations: The forward P/E of 31× implies the market already prices in continued earnings acceleration. A slowdown in customer acquisition or a shift in capital‑expenditure cycles (e.g., delayed large‑venue deployments) could pressure the multiple. Keep a tight stop just below the recent 50‑day EMA (~$5.10) to manage downside.

3. Position sizing: For a portfolio tilt toward high‑growth security tech, a modest overweight (5‑7% of equity) in EVLV is justified, with a target price of $7.20–$7.80 (EV/Rev ≈ 2.0×). Pair this with a hedge in a broader security‑technology ETF (e.g., iShares U.S. Aerospace & Defense ETF (ITA)) to mitigate sector‑specific volatility.