Wrap Technologies (WRAP): A Law Enforcement Tech Breakout at a Crossroads

The law enforcement technology sector is at a critical inflection point, driven by escalating demand for non-lethal tools that reduce use-of-force incidents, lawsuits, and community tensions. Wrap Technologies (NASDAQ: WRAP) sits at the center of this secular shift, yet its stock remains overlooked despite validated product efficacy, operational margin progress, and a $100M+ opportunity in Chile—a transformative deployment that could redefine its valuation. Let’s dissect why now is the moment to act.

Data Validation: BolaWrap’s Proven Impact

Wrap’s BolaWrap device—a non-lethal, hands-on tool to subdue suspects—isn’t just a product; it’s data-driven evidence of systemic change. According to Q1 2025 earnings calls, U.S. agencies report the BolaWrap is used 2–5 times more frequently than alternatives like tasers or batons. This isn’t anecdotal:

• In one major U.S. department, BolaWrap adoption correlated with a 30% drop in use-of-force incidents and a 45% reduction in citizen complaints.
• Another agency saw a 50% decline in officer injury claims after deploying the tool.

The result? A $77.5M market cap company addressing a global issue with a tool that quantifiably improves outcomes. This data is now being leveraged to secure political buy-in, with Wrap engaging directly with mayors, governors, and embassy officials to push adoption.

Margin Improvements: The Tipping Point

Wrap’s financials are often dismissed due to its operating loss of $3.9M in Q1 2025, but this overlooks a critical detail: the gross margin has surged to 77.8%, up from 56.6% in 2024. This is no fluke.

• Cost of Revenue: Reduced by 73.4% to $170,000, thanks to optimized manufacturing and economies of scale.
• Scaling Opportunity: With its Virginia production facility operational, Wrap can now produce units at $100–$200 per device—a fraction of competitors’ costs.

The path to profitability is clear: as revenue grows, the fixed costs (e.g., R&D, sales) will dilute, turning the 77.8% gross margin into a positive operating margin.

Chile’s $100M+ Deployment: The Catalyst

The crown jewel here is Chile’s Carabineros rollout, a multiyear initiative to equip 33,000 officers with BolaWrap devices. What’s underappreciated?

1. Scale: The initial order of 500 units has already grown to 2,000 units, with plans to expand further. At $100–$200 per unit, this is a $200,000–$40.8M contract—and that’s just the start.
2. Validation: Chile’s public budget allocation and government endorsement signal this is a non-negotiable priority, not a pilot.
3. Global Ripple Effect: Other nations, including Italy and Australia, are watching Chile closely. Wrap’s CEO, Scott Cohen, notes, “Every indication is it’s a go” for Chile, and this could unlock $100M+ in global contracts.”

Ex-Im Bank Financing: Breaking International Barriers

Wrap isn’t just betting on Chile—it’s weaponizing U.S. Export-Import Bank (Ex-Im Bank) financing to dominate global markets. Why does this matter?

• Access to Capital: Ex-Im Bank loans allow foreign governments to finance purchases of U.S.-made goods, including Wrap’s devices. This eliminates cash-flow barriers for buyers.
• Strategic Hire: A former Ex-Im Bank adviser now leads Wrap’s international sales, accelerating deal structuring.

The result? Wrap can replicate Chile’s model worldwide. As Cohen puts it, “The international opportunities here are absolutely massive.”

Valuation: A $77.5M Stock in a $100M+ Deal Pipeline

At its current valuation, Wrap trades at 0.7x sales, even as it secures multimillion-dollar contracts. Consider:

• Chile’s Full Rollout: If 33,000 officers are equipped at $200/unit, that’s $6.6M upfront—and recurring training/replacement revenue.
• Global Pipeline: Over 10 countries are in pilot discussions, with Chile’s success primed to accelerate these deals.

The math is simple: a $100M+ revenue run rate would push WRAP’s valuation to $1.5B+, a 20x jump from today.

Risks & Why They’re Overblown

Critics will cite Wrap’s negative operating margin and reliance on international execution. But:

• Margin Pathway: Gross margin improvements are structural. As revenue hits $20M/year, fixed costs will shrink into irrelevance.
• Execution Risk: Chile’s government has already allocated funds, reducing political uncertainty.

The bigger risk? Missing the non-lethal policing megatrend. Wrap is the only pure-play stock with scalable solutions here.

The Bottom Line: Buy Now Before the Re-Rating

Wrap Technologies is at a sweet spot: validated data, margin leverage, and a $100M+ catalyst in Chile. With a stock price languishing at $0.50/share, this is a “buy the dip” opportunity. The next catalyst? Second-half 2025 delivery of Chile’s 2,000-unit order, which could trigger a valuation re-rating.

Act now—before the world catches on to this law enforcement tech breakout.