Evolv Technologies Holdings (EVLV): Valuation Update Following Q3 Growth, Improved Outlook, and AI Product Milestone

Evolv Technologies Holdings (EVLV) just rolled out its third quarter results, posting strong revenue growth and a major improvement in net loss. At the same time, the company boosted its 2025 outlook and pointed to progress in its AI-powered security products.

See our latest analysis for Evolv Technologies Holdings.

Momentum has picked up for Evolv Technologies Holdings after a wave of milestones, from a robust third quarter performance and raised 2025 revenue guidance to growing adoption of the company’s AI-powered security platform. The stock’s latest surge stands out, with a 49% year-to-date share price return and a remarkable 126% total shareholder return over the past year. This reflects growing confidence in both its technology and business execution.

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Yet with shares already up more than 120% in the past year and trading below most analyst targets, the key question now is whether there is still meaningful upside left for Evolv Technologies Holdings, or if the market has already accounted for future growth potential.

Most Popular Narrative: 37.7% Undervalued

With the most popular narrative assigning a fair value of $9.50 per share, Evolv Technologies Holdings trades well below this estimate, closing recently at $5.92. The gap has narrowed as the price surged; however, strong projections underpin the narrative’s bullish stance on future earnings and operational momentum.

The increasing prevalence of large multi-year contracts with public school systems and hospitals, driven by heightened public safety concerns in high-density environments, is expanding Evolv's total addressable market and should support outsized revenue growth over the coming years. Growing customer adoption and frequent upgrades to newer platforms like Gen2 and eXpedite reflect a successful technology road map that is boosting customer retention rates and fostering longer-term subscription commitments, positively impacting both ARR and net margins.

Read the complete narrative.

Curious what future growth rates, cost improvements, and bold margin assumptions power this optimistic fair value? The narrative hints at a transformational leap, spanning recurring revenues, profit margin resets, and a radical shift in industry standing. Unpack the numbers and logic driving this bullish case when you explore the full story.

Result: Fair Value of $9.50 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, significant near-term risks remain, including pressure on profitability from heavy upfront costs and uncertainties related to expanding the customer base in new verticals.

Find out about the key risks to this Evolv Technologies Holdings narrative.

Another View: Multiple-Based Valuation Raises Questions

Looking through a different lens, Evolv Technologies Holdings trades at a Price-to-Sales ratio of 7.6x, which is notably higher than the US Electronic industry average of 2.3x, its peers’ 4.8x, and the fair ratio of 4x. This premium suggests investors expect exceptional growth and future profitability. However, it also adds a layer of valuation risk if targets fall short. Could the optimism already be priced in, or is this a sign of further upside?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Evolv Technologies Holdings Narrative

If you want to take a different approach or dig deeper into the data, you can craft your own narrative in just a few minutes. Do it your way

A great starting point for your Evolv Technologies Holdings research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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