KULR Technology Group (NYSE American: KULR) stock is higher by more than 16%* since June on the heels of two special transportation permit authorizations from the US Department of Transportation to transport prototype lithium cells and batteries aboard cargo aircraft. Year-to-date, KULR stock is higher by more than 65%. Better still, the trend since the start of 2021 remains decidedly bullish. (*share price of $2.37 on 7/2/21)
To those new to the KULR story, shares rocketed after the company posted a 439% increase in comparative Q1 revenues. Better still, Q2 is expected to deliver potentially stronger results as a result of several deals made toward the end of Q1 and from revenue recognition from agreements made in the earlier parts of its second quarter. Add to that its successful $8 million capital raise, up-list to the NYSE-American exchange, and ability to secure hard-to-get permits, KULR appears to be in its best operating position in history to capitalize on and maximize near and long-term market opportunities. Investors expect that KULR will provide details on several of its initiatives later this year when it hosts its Inaugural 2021 KULR Battery Solutions Day on September 21, 2021.
Still, while that presentation is about two months away, there’s plenty to focus on now. In fact, its battery safety technology just earned its third patent covering Thermal Runway Shield (TRS) technology. And that’s a big deal to protect the technology that could be a substantial piece of the surge in lithium-ion batter use. In fact, the patent protection could be protecting what some believe is a billion-dollar IP asset. Moreover, with the patent protecting its passive propagation resistant technology, which reduces the hazardous risks associated with thermal runaway in lithium-ion battery packs, KULR may be the go-to source for battery safety solutions. Notably, NASA already uses this TRS technology to transport to and store batteries aboard the International Space Station. By the way, it’s part of Perseverance Mars Rover, too. Thus, for a stock trading at $2.37, it’s getting significant endorsements.
Better still, with KULR strengthening its IP portfolio covering a comprehensive list of battery safety technology, it could soon become the dominant player in the sector to protect against disastrous battery failures. And its applications range from space technology to consumer goods. Therefore, KULR’s market reach is almost limitless. In fact, if a lithium-ion battery is used, as it already is in millions of products, KULR technology can be involved.
The permits awarded in June, however, are expected to expedite revenue growth. And investors could be pleasantly surprised once those numbers get announced.
Special DoT Transport Permits Put Stock In-Play
In fact, those two DoT permits could help drive revenues sharply higher as soon as this quarter. Investors may get a hint of their impact when its Q2 numbers get announced in August. What is known, though, is that KULR’s new source of revenues can be substantial. In fact, KULR is one of the select few authorized to transport lithium-ion and metal batteries for recycling. And with lithium-ion battery use soaring in almost every public and private market, their value becomes a lucrative long-term value driver.
Keep in mind, those lithium-ion batteries used to power everything from lawnmowers to power tools all require special handling for disposal and recycling purposes. And with millions of people following disposal protocol, the revenue-generating potential is already a potentially exponential revenue-generating opportunity. Of course, KULR already knows this. And if they expound on that potential during its next earnings call, or sooner, the valuation disconnect between share price and assets will likely close.
Better still, new revenues from all its Q1 and Q2 milestones add to the massive momentum created during its Q1. Further, it’s important to note that KULR’s 439% increase in Q1 comparative revenue gains came ahead of its strengthened balance sheet, enhanced operating facility, and news of its new smart battery product designed to capitalize on a more than $127 billion commercial drone market. Best of all, KULR has a product and technology pipeline that already positions them to capitalize on multiple and diversified initiatives that combine seamlessly to maximize income by reducing redundant costs.
And combining near-term permit-related opportunities with its impressive cash position creates a recipe for success. KULR has a lot of initiatives in play to make that happen.
Taking Battery Safety Technology In-Flight
A program that could quickly and substantially impact KULR’s revenue-generating strength could come from its in-flight applications. There, its technology shows a compelling capacity to mitigate ion-battery malfunctions, including fire and explosion. That could be why the FAA is evaluating its technology for use in aircraft. And if the FAA was to mandate battery safety into aircraft, the results could be a company-changing event. Remember, KULR technology is well protected by patents.
Moreover, with the FAA’s role to protect the public from catastrophic failures, their recommendation to implement KULR solutions wouldn’t be cost-prohibitive to airplane and component manufacturers. Even a tiny part of this massive market can potentially generate billions of dollars over the long term. Many speculate that the FAA will have a hard time not acknowledging inherent hazardous situations related to lithium-ion battery use. Therefore, with a relatively simple inclusion, many expect the FAA to concede to the benefits that KULR technology can deliver.
While on the subject of flight, as noted, KULR already works with NASA, which utilized KULR’s passive propagation resistant solutions aboard the International Space Station to protect Microsoft (NASDAQ: MSFT Surface Pro tablets. And that inclusion isn’t by chance. Both NASA and Microsoft are likely fully aware of the importance of using KULR technology to prevent thermal runaway propagations onboard the ISS.
Other deals include a dual-use opportunity with the Marshall Space Center to integrate its technology into 3D-printed battery systems for manned and robotic space applications. Also, Leidos and Lockheed Martin (NYSE: LMT) are evaluating KULR technology to include in hypersonic and directed energy defense applications. Those programs are advancing through the development stages. And while those markets can be substantial, its technology applied to the microelectronics sector could deliver the biggest bang for the buck.
Still, the best news for KULR and its investors is that the company is far from peaking. In fact, they are in a period of hyper-growth.
Maximizing Facility Expansion
During its Q1 conference call, KULR said they are well-capitalized to accelerate growth through a diversified commercialization strategy. Better still, they can meet enhanced opportunities from its new facility that is roughly 4X larger than its current location, allowing KULR to significantly expand bookings and client engagements. That’s already happening.
Tapping into the massive EV market, KULR has become the official thermal management and battery safety technical partner for Andretti Technologies, the advanced technology arm of Andretti Autosport. And that’s not just a fancy designation. In fact, KULR is the point company to develop a thermal management testing and design platform to provide high-performance, specially adapted battery solutions to meet the rigorous technical requirements of Andretti’s global racing enterprise.
Beyond the Andretti-specific applications, the deal can be substantially bigger as the two combine expertise to co-develop and co-market battery and safety technologies to automotive partners for mass-market EV applications. It’s a deal that can add tremendous long-term value. In fact, General Motors (NYSE: GM) just threw another $10 billion toward its EV efforts, adding to the $35 billion investment announced in June. Thus, the partnership, especially with the Andretti brand recognition, could earn a sizable share of that specialized market. With the EV sector booming, the excellent news is that traction toward that goal can come sooner rather than later.
Better still, there’s even more to like.
KULR Earns $4.50 Price Target
Investors should pay close attention to a potentially massive agreement with a leading supplier of electronic components in smartphones. KULR alluded to a “developing” deal with a large consumer electronics company in a company presentation. And while they didn’t specify any particular company, the takeaway is that KULR technology may be close to securing inclusion into hundreds of millions of consumer products, including phones, over the next several years. And with lawsuits mounting from lithium-ion battery explosions, battery safety, especially when made available, can’t be ignored by manufacturers much longer.
That’s likely one of the reasons that analysts at Taglich Brothers revised its share price target higher to $4.50, suggesting an upside of 89% from current levels. Other reasons in the report support their bullish thesis. They point to substantial revenue growth, a growing list of top-tier clients, and its patent-protected thermal management and heat dissipation technology as a means of driving significant growth in the current and coming quarters. Combined, Taglich expects that KULR revenues can triple by the end of 2021 by maximizing enhancements from its new facility.
Still, while bullish in any sense, factoring in new revenue-generating potential from deals made with Andretti Technologies, Volta Energy, and Drako, those lofty estimates could still be conservative. In fact, while under-the-radar, its battery safety technology for grid and stationary energy storage modules could provide considerable growth this year. KULR already suggested that its deal with Volta could start to ramp considerably by the end of this year.
Thus, with KULR stock trading at only $2.37 and a market cap of $223 million, there’s plenty of room for growth. And the remaining part of 2021 could help light that fuse.
Best of all, KULR is taking on new opportunities from its best operating position ever. And with multiple revenue-generating shots on goal from numerous billion-dollar markets, the investment proposition may have never been better. Moreover, those markets are well-protected from competitors through an IP portfolio that covers design and function. So, whether programs take three weeks or three years to develop, KULR is well insulated from competitive poachers.
And whether one then applies a sum of the parts calculation or a valuation based on a single billion-dollar opportunity, KULR is priced for potentially exponential appreciation. However, with potential catalysts in view, that opportunity may tighten considerably going forward.
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