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KULR’s 2022 Milestones Reached Put A Q4 Breakout In The Crosshairs ($KULR)
If there is one thing to know about KULR Technology Group Inc. (NYSE: KULR), it's this- they have positioned themselves to dominate the lithium-Ion battery safety market. And the better news; results from that work are showing, with revenues scoring record levels, costs decreasing, and expansion of its innovative technology into several high-volume, high-dollar markets. In other words, while many viewed KULR as a premier play to get exposure into the massive EV battery safety market, they now have much greater depth, with milestones reached putting revenue-generating opportunities from maritime safety, aerospace applications, consumer products, and energy storage markets in its crosshairs.
In fact, the best way to describe the KULR of today is that it provides ideal total battery safety solutions enabling more efficient battery systems, increased sustainability, and end-of-life battery management. In other words, KULR has developed a vital technology and become an integral part of the migration to a global circular economy. Thus, the near and long-term rewards could be significant for investors taking advantage of a KULR share price that looks appreciably disconnected from its intrinsic and inherent values.
And that's not hype. It's based on KULR helping develop the right markets at the right time.
A $554 Billion Energy Storage Market
Better said, KULR is doing more than helping to develop parts of the market; they are pioneering it. That's a big consideration when assessing a more appropriate value for its stock. Remember, its expertise in providing thermal management and lithium-Ion battery safety solutions is essential to the growing energy storage market, which is expected to reach $554 billion by 2035.
Why is that a big deal for KULR? Because its Thermal Runaway Shield (TRS) technology prevents battery explosions. And industries are paying attention, as evidenced by the International Space Station and NASA utilizing KULR's proprietary carbon fiber technology to handle the massive heat needing to be absorbed by its products. And they aren't the only ones interested.
KULR has also expanded its strategic relationship with E-One Moli Energy Corporation for Molicel's battery cell supply, accelerating its role in serving high-value clients in an estimated $350 million market. They aren't the only ones adding to previously announced agreements and contracts.
Lockheed Martin (NYSE: LMT) provided KULR a follow-on order for its PCM heat sink technology. Financial considerations weren't disclosed, but it's fair to assume that the potential from the deal, once LMT is through its evaluations, could lead to a massive contract. If so, it will add to the three-year multi-million deployment order for its Passive Propagation Resistant ("PPR") solution suite from Volta Energy Products, a subsidiary of Viridi Parente Inc. This company just announced raising $95 million, much of which will be invested in developing 'fail-safe' lithium-ion battery technology.
That's not all. KULR also announced expanding a battery safety contract with NASA to test its lithium-ion cells for battery packs designed for the Artemis Program, a series of US-led international human spaceflight programs. That's not the first time NASA utilized KULR's technology; its innovative carbon fiber thermal management solutions are included on the Mars Perseverance Rover and also used to keep components from freezing during NASA's NICER mission.
Furthermore, KULR collaborated on a project to safely ship and store laptop batteries aboard the International Space Station using its Thermal Runaway Shield (TRS) technology. Most simply, KULR's technology is being used to protect multi-billion dollar assets. That does more than provide testament to its value; it validates it.
An Appreciable Valuation Disconnect
So, it's fair to ask why KULR stock isn't scoring all-time highs in 2022. The reason may be simple-its inclusion in the Russell Microcap index could be weighing the stock down. But with over thirty contracts with NASA and deals with the Department of Transportation, U.S. Air Force, global business conglomerates, and companies critical to the national security interests, current weakness exposes opportunity.
Analysts at Litchfield Hills Research think so. They modeled for KULR shares to reach $7.00 in the coming quarters. They highlight KULR's potential to grow from leveraging the technological firepower inherent to its NEXT-Gen cooling solutions. Revenue-generating opportunities from that technology include those from the aerospace, electronics, energy storage, 5G infrastructure, and electric vehicle manufacturers sectors. KULR technology makes their products cooler, lighter, and safer for consumers.
While several contracts can make that happen sooner than later, its deal with Volta Energy Products is one to watch near term. Currently, Volta plans to bring between 750 to 1,000 battery storage units (using KULR's technology) to market in 2022. But that number is expected to increase to upwards of 50,000 units in 2023. If so, revenues could appreciate exponentially, with some estimates suggesting at least $80 million can be accrued during 2023 if prices per unit remain constant and the maximum number of units were shipped. Even factoring in volume pricing discounts and the potential for less than the maximum number of units being shipped, expected revenues are still anticipated to eclipse $40 Million for KULR in 2023.
That's still just a part of the value inherent to KULR. Industry and regulatory initiatives enhance targeted opportunities, including those from battery recycling and clean energy solutions, which expands an already substantial global addressable market. Remember, it's a big market that's getting bigger, supported by market research indicating KULR's innovative technologies can target opportunities in the thermal management systems market expected to reach $24.8 billion by 2025. Lux Research, a global research and advisory firm, takes it a big step further.
They see the energy storage market's annual revenue potential explode higher, expecting it to become a $554 billion opportunity by 2035. Global green-energy initiatives, including zero-emissions goals, contribute to that lofty expectation. KULR's presence is felt.
Deals With Major International Companies
That results from KULR's integrated design approach offering comprehensive solutions in thermal interface materials, lightweight heat exchangers, and protection against lithium-ion battery thermal runaway propagation. Those capabilities are being met with enthusiasm, especially from its ability to be designed to fit demanding configurations and applications.
That led to deals with some of the largest car companies in the EV sector, including a partnership with Andretti Technologies (ATEC) to provide thermal management and battery safety solutions to its electric SUV extreme racing team Andretti United Extreme E. That deal can also benefit from joint research to potentially co-market proprietary battery products and solutions. The EV sector isn't alone in driving value.
In addition to those mentioned, KULR is working with Leidos (NYSE: LDOS), with them capitalizing on KULR's best-in-class battery safety technology. KULR's recycling partner, Heritage Battery Recycling, is also adding to the value proposition, providing immediate and open access to commercial partners and customers after securing United Parcel Service (NYSE: UPS) shipping certification. That certification does two things.
First, it allows for the shipment of batteries utilizing the KULR Safe Case products through UPS' vast shipping network. Second, it allows its U.S. Department of Transportation compliant "Safe Case" to be used as a safe and reusable shipping container for Li-Ion battery transportation up to 2.1KWh, an allowance providing KULR's major recycling partner a safe shipping container that can handle batteries above 300Wh. With billions of lithium-Ion batteries needing proper disposal, the opportunities in play are enormous.
Weak Markets Expose Opportunities, KULR Is One
That's not all. Those deals add to four major commercial accounts for its Safe Case products, with deployment trials underway. If all goes as expected, several multi-million-dollar recurring commitments could be inked as early as Q4. Additionally, KULR highlighted progress in its biosensing solution for its Fortune 50 Metaverse customer, saying in its earnings call that its revised engineering design improves pliability, increases conductivity, and enhances softness to the skin for use in their products. That deal is expected to continue to develop through 2022.
Factor in KULR's penetrating the drone markets and opportunities presented from the maritime safety markets, its commitment to developing a universal modular battery product by combining its PPR technology and CellCheck for E-mobility, and the revenue-generating opportunities get multiplied. Targeted markets include those from the enterprise energy storage, data center, and crypto-mining applications, where KULR can do more than penetrate; with robust IP protections, they can dominate.
Thus, while weak markets hurt portfolios, they do expose opportunities. KULR is one. Perhaps best of all from that perspective is that KULR's parts are growing, with partnerships, operating performance, and best-in-class technology combining to provide multiple shots on high-dollar revenue-generating goals. That means an attractive proposition today can get more compelling by tomorrow, making investment consideration another thing- timely.
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