KULR Technology (NYSE-AMER: KULR, $KULR) keeps getting stronger. And with a significant revenue-generating tailwind continuing to create new opportunities and maximize existing ones, 2022 is set up to be KULR’s best year ever. Commentary from KULR’s Q4 conference call certainly suggests that’s the case. And not only is KULR talking the talk, but they are also backing up their bullish sentiment by announcing new contracts with the Department of Defense, seizing upon a massive opportunity related to the United States Coast Guards’ upcoming safety requirements for the passenger vessel market, and with guidance that makes its impressive Q4 growth a drop in the bucket compared to what’s in its revenue-generating crosshairs. By the way, those invested in KULR know that management is not a team to overpromise and under-deliver.
Instead, this small-cap company keeps its word by doing what it does best- create innovative battery safety solutions that target diversified billion-dollar-market opportunities. Its technology is so compelling that they have inked deals with the DoD, global defense and aerospace conglomerates, NASA, and the Andretti Enterprise team. That’s just a sampling of clients and partners. Quite a few more bring to KULR their own potentially multi-million dollar deals. Thus, don’t let KULR’s roughly $2.50 share price mislead you; this company is ideally positioned for a breakout in 2022.
In fact, for all intents and purposes, KULR is doing everything right. Last quarter, KULR posted an increase of 267% in total revenues, increased its cash position by $6 million, expanded its business reach into new market segments, and gained across-the-board momentum in getting its best-in-industry battery safety technology into multiple and diversified markets.
That’s not all. KULR announced having cash on hand at the end of Q4 of $14.9 million. That’s one of KULR’s heathiest cash positions in history and, perhaps more importantly, can facilitate KULR to expand operations, support new business, and fund ongoing product development through all of 2022. While those Q4 numbers now provide a historical precedent, 2022 guidance calls for more of the same. Potentially much more, and those paying attention see the clues.
A Growing KULR Team
A big one is that KULR increased its team six-fold, saying it did so to stay ahead of surging client demand. They obviously see behind the curtain, and deducing that KULR needed roughly 40 more team members to operate efficiently is indeed a bullish indicator. And KULR didn’t just add entry and mid-management positions. They added more key talent to its high-caliber management team, appointing former NASA Johnson Space Center senior leader, Dr. William Walker, as its new Director of Engineering. KULR said his role will be to work with its engineering team on its next-generation high-performance computing (“HPC”) and hypersonic vehicle thermal management initiatives.
The rest of the KULR team will likely be busy as well. As a matter of fact, KULR’s groundbreaking battery safety technology could lead to KULR making more revenue-generating deals than ever before. Recent KULR updates indeed suggest that to be the case. And as record numbers of powerful lithium-ion batteries get compacted into smaller housings, the need for KULR’s products won’t evaporate anytime soon. Therefore, it’s logical to conclude that KULR is in the right markets, with the right products, at the right time. Its 267% surge in quarterly revenues does well to prove that point.
Thus, it’s understandable that KULR stock has jumped into mini-rally mode, spiking by 24% since March 15th. Investors are taking notice of the valuation disconnect. But, despite those gains, plenty of intrinsic value is being ignored, and even more so for what those assets can do inherently. Whether it’s a case of the small-cap market underperforming the big names or that investors are keeping financial powder dry until markets normalize, one thing is for sure- KULR stock is more than ripe for investment consideration.
Creating Optimism for the Future
In fact, being better positioned than ever before and with demand creating the need to hire 40 new team members, KULR deserves more than only consideration; they warrant investor action. Moreover, investors are already positioned to do well, with KULR stock more than worthy of re-claiming, with justification, its 52-week high of $3.81 right now. That’s not hype. Valuing just one of its targeted opportunities, or even its IP can justify that price. But adding in the whole of its diversified market opportunities, a multiple of that high could be argued for.
By the way, KULR and bullish investors aren’t the only ones tooting the horn of optimism. Last week, the Litchfield Hills Research group reiterated its $7 price target on KULR. Their report noted their belief that KULR is undervalued based on two valuation techniques, one absolute and one relative; 1) The discounted value of all future earnings was used for its price target, 2) Valuation relative to peers. (Take a look at the entire report published on KULR’s website. It will keep number crunchers busy for hours and provides a great financially supported model and roadmap for why KULR stock can nearly triple in value over the next 12-months.)
But, while it’s all numbers for some, the narrative supports the case for higher prices too. In fact, understanding the groundwork done by KULR in 2021 compliments the financial analysis and further enhances the thesis for near and long-term share price appreciation. Still, while 2021 was transformative, investors need to evaluate KULR from a forward-looking perspective and pay less attention to the bottom line of the last quarter. Why? Because Q4 numbers don’t accurately depict what’s happening in real-time. Hirings, infrastructure builds, and front-loaded project costs skew the angle too far to the negative, showing a bottom-line loss instead of revealing a company in its best position in history to create substantial shareholder value.
And the better news is that KULR has diversified itself to reap significant financial rewards from a diversified client list representing multiple sectors. In the revenue-generating crosshairs this year is business from government, defense, energy storage and transportation, aerospace, regulatory, and e-mobility. Factor in consumer markets using lithium-ion batteries, and the markets become close to a combined trillion-dollar opportunity. The better news- that list isn’t exhaustive of all its client opportunities. KULR’s battery safety technology can expand well beyond the application sources listed.
Growth Begets Growth
And that’s likely. Another promising sign for investors is that milestones reached in KULR’s end-of-year update may foreshadow even more significant events on the investment horizon. Actually, there’s quite a bit happening to transform those milestones into catalysts.
One could come from KULR’s expansion of its KULR-Tech Safe Case product line with a new Passive Propagation Resistant (PPR) for maritime lithium-ion battery safety. This product has the potential to become the first PPR solution meeting the United States Coast Guard’s new safety requirements to reach the market. KULR targets the massive commercial cargo, shipping services, fishing vessels, consumer products, and cruise ship markets with this product. Billions of dollars will be in play. Remember, too, this will be a USCG requirement, not a recommendation. So, those potential revenues can start to roll in sooner than later.
They just might. After all, KULR’s PPR solution is the best known, if only battery safety solutions against fire and explosions in the market. When considering the Coast Guard’s increasingly stringent safety requirements for its onboard equipment, KULR is in a great position to capture a substantial part or even all of the market share. Moreover, their foot is already well inside the door to make that happen.
More Deals Made, More Revenues in 2022
KULR’s 2022 prospects don’t stop there. Volta Energy Products, a subsidiary of Viridi Parente, Inc., has ordered a three-year deployment of KULR’s PPR solution suite – a multi-million-dollar transaction. With access to KULR’s Thermal Runaway Shield (TRS) technology, Volta Energy can improve its stationary and mobile lithium-ion battery power systems. Already, KULR has sorted over $1.6 million worth of products set to ship immediately. Better yet, KULR guided that shipment and order volumes are expected to increase over the year. Thus, this is a big deal that is getting even bigger.
Keep in mind, too. Not only does KULR employ some of the brightest engineers in the industry, but the company also benefits from shrewd acquisitions that bolster R&D prospects. One example is Centropy AB, which KULR acquired last year. Centropy AB is the proprietor of a novel carbon fiber-based heatsink technology for High-Power Computing (HPC) applications. This technology dramatically bolsters KULR’s thermal management solutions for HPC applications, ranging from crypto-mining and VR simulations to big data analysis and healthcare imaging. This is a tried-and-true technology, with KULR’s heatsink being used in four different NASA projects, including the X-38 re-entry vehicle.
This technology, by the way, presents several distinct and potentially lucrative opportunities. First, the demand for HPC is skyrocketing, especially as big data analysis dominates in a myriad of industries. As a result, KULR should benefit from significant interest in its products. Second, the product has ideal synergy with the rest of KULR’s product line, minimizing the dampening effects of administrative inefficiencies and mismatched demands. In other words, KULR may be doing different things in different markets. Still, they do so through an infrastructure model designed to keep all its work accretive toward a common goal of creating shareholder value and bottom-line profitability.
Maximizing Connections with Industry Leaders
KULR’s acquisition of Centropy AB was an excellent addition to help that mission, but the deals KULR is making go far beyond that one. In fact, KULR is establishing relationships with some of the world’s top defense, aerospace, and consumer products companies. One such example is the Lockheed Martin Corporation (NYSE: LMT, $LMT), which recently ordered about $500,000 worth of KULR’s PPR battery systems. If Lockheed Martin is impressed by KULR’s products, this deal could pave the way for a lasting relationship that ushers in millions in revenues for the company. That may even be a conservative estimate, with some contracts in the sector reaching tens of millions and even billions of dollars exchanged.
There’s still more to like. KULR also announced joining the U.S. Department of Energy’s lithium-ion battery lifecycle initiative alongside Clarios. Together, the two companies are working to improve the sustainability of lithium-ion batteries by enhancing the manufacturing and reuse processes. KULR also extended its partnership to Heritage Battery Recycling, which recently merged with Retriev Technologies to create the largest lithium-ion battery recycling company on the continent. Having secured these high-caliber contracts, KULR is well-positioned to seize the lion’s share of that sector opportunity. Working with the largest recycling company on the planet brings that kind of potential.
KULR is also benefitting and should continue to do so from business connections with NASA and Andretti Enterprises, representing potentially enormous revenue streams in the near and long term. In addition to the company’s heatsink technology used in several NASA projects, KULR also played a role in the 2020 Mars Perseverance ROVER program. As noted, the company also collaborates with the Andretti team to develop battery safety solutions for EVs that target another booming market. And investors can’t leave out or fail to value KULR’s working relationship with Leidos (NYSE: LDOS, $LDOS), which is helping the company bring additional lithium-ion battery storage solutions to the markets.
That’s not all. KULR technology may be the go-to choice for thousands of other global clients, protecting everything from EV, aircraft, power tools, consumer products, and even hypersonic missiles. In fact, some argue it’s not a matter of if but rather an issue of when legislation causes all lithium-ion battery products to be encased with KULR or competitive technology. But, with KULR’s IP protecting this innovative asset, the competitive landscape may stay thin, perhaps even non-existent. That’s worth a premium, too,
Approaching a Breakout Year in 2022
Here’s the best news of all to support the KULR investment proposition. They generally target only the big-ticket market opportunities where initial revenues start in the million-dollar range. And already, KULR has begun to penetrate several multi-billion-dollar markets, leveraging a best-in-industry company and best-in-class product reputation for itself and its products.
Undoubtedly, being the best matters. And putting KULR side by side with anyone else in the battery safety products markets wouldn’t be fair. KULR, at this point, is simply that much better. And don’t expect them to give up any competitive space. KULR is in it to win it, and acquisitions made in 2021 and those planned for 2022 will help turn that ambition into reality.
As a result, expect share prices to trend higher. Current share price levels are nowhere near being fairly and appropriately valued. And analysts agree, modeling for a more than 180% gain to its share price from its current levels. They see what savvy investors should- KULR is in the right markets and, from them, has multiple shots on potentially lucrative revenue-generating goals.
And with the FAA, the DoD, and a Who’s Who client list buying what KULR is selling, they appear to be spot-on. Moreover, while its Q4 report was impressive, its Q1 is expected to be even better. Thus, if KULR says what analysts and investors want to hear in April, KULR stock could be off to the races. It wouldn’t be the first time KULR stock posted high double-digit percentage gains after reporting good news. This time, though, with revenues expected to be much higher, costs lower, new contracts, and a growing client list, valuations at higher lows will likely hold, making investment consideration ahead of that update a wise consideration.
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