Financial News
KULR Technology Group, Inc. Guides For 269% Revenue Increase; Gross Profit Expected To Increase By 56% (NYSE-AMER: KULR)
KULR Technology Group (NYSE-Amer: KULR) posted tremendous guidance last week. While that's good for them, the even better news is that investors still have a chance to capitalize on a value play that the markets overlooked. That's the great thing about investing in under-the-radar companies like KULR; substantial ground floor positions can be taken while the mainstream mob is busy following the trade of the day.
To those in KULR, they may be in the right place at the right time. For those considering a position, act quickly. Why? Because the guidance KULR published is impressive. More importantly, once its estimates become official, KULR's share price, on a valuation basis alone, should respond quite favorably. And deservedly so.
The numbers tell its story. KULR expects a more than 200% increase in comparative quarterly revenues, a 269% jump in six-month sales, a sharp percentage gain in gross profits, and sustained sequential growth. Even better, the estimates go beyond its expectations to drive revenues substantially higher. KULR also expects the back half of 2021 to be one of its best ever in terms of client engagements.
Here's what investors know so far.
YTD Guidance Epects Triple-Digit Percentage Growth
In its pre-announcement on August 3rd, KULR said it expects to post a roughly 200% increase in comparative Q2 revenues. The numbers are even better on a six-month comparison, where sales are expected to surge more than 269% over the same six-month period last year. Perhaps the best news from an investor's perspective, though, is that KULR enhanced that guidance, saying its revenue-generating momentum is not slowing down.
From a valuation perspective, that's excellent news. And with shares consolidating at roughly $2.05, its price may be offering a short window of opportunity to catch value ahead of its formal earnings release expected later this month.
An even better opportunity may be in play for proactive investors that understand that while KULR's guidance is decidedly bullish today, they also set the stage for potentially exponential growth in the coming quarters.
There's plenty of data to support that expectation.
Sequential Triple-Digit Percentage Increases
Foremost, revenues continue to surge. Better still, so are its gross profit numbers. KULR said it expects to post a more than tripling in sales to $620,000 compared to its three months ended June 30th, 2020. Impressive, too, is that gross profit is following along, jumping to an expected $180,000 compared to the same period in 2020. That's a 16% spike over last year. Notably, and to KULR's credit, increases to both happened in the face of severe pandemic-related headwinds.
Its six-month comparative results look even better. For the period ending June 30th, 2021, KULR expects a more than 269% increase in revenues up toward $1.03 million. That's a substantial increase from its $278,628 earned in the same period last year. Keep in mind, too- that surge came amid some of the most logistically challenging business periods in decades, with consumer, public, and private markets near a standstill. And despite the forces faced, KULR still expects to post extraordinary growth. Better still, knowing what KULR can do in the face of economic uncertainty, investors would be wise to trade ahead of what KULR can do in normalizing markets.
By the way, gross profit during its 1H 2021 stretch is expected to jump by more than 56% to $320,000. The more excellent news? KULR looks better positioned than ever to substantially beat those numbers during the back half of this year.
Here's why.
Cash Balances Surge By 1482%
To start with, KULR's cash on hand is roughly 1482% higher than it was at the same time last year. In fact, its roughly $12 million in cash on June 30th is exponentially more than its $767,906 last year.
And while the increase came with some dilution through exercised warrants and a registered direct offering, the immediate and long-term benefits should substantially outweigh the increase in outstanding shares. Notably, insider ownership is impressive as well, with its most recent filings showing 40.36% of its shares owned by company insiders.
Don't undervalue the importance of that report. It shows that insiders have every incentive to create value for their retail and institutional investor base. And it's a reasonable expectation that they will drive that value through the most accretive means possible. Moreover, with KULR insiders heavily reliant on share price appreciation to enrich their own portfolios, investors can expect strategic decisions to exploit win-win propositions. Management is doing just that.
They are already on record saying that strong year-over-year revenue growth is expected to continue for the remainder of 2021. Driving that growth is its focus toward mass-market applications and benefits from scaled-up manufacturing. Its widening client base and targeting of adjacent markets complementing its established battery safety and thermal management products strengthen that mission.
Monetizing two special permits awarded by the Department of Transportation shows that strategy in action. Those permits grant KULR a unique right to transport lithium-ion batteries for recycling and end of battery life disposal. KULR noted in its guidance as well that those permits are generating significant interest and revenue-generating traction from current and potential clients who need safe and compliant shipping and disposal solutions. Better yet, they expect increased market penetration in the space in subsequent quarters.
The better news is that those permits, while potentially significant value drivers, are only a small part of KULR's operations. And with KULR being in the strongest cash position in its history and having virtually no debt, its ambition combined with ability could help them maximize current contracts and reach several new milestones by the end of this year.
Analysts appear to share that sentiment.
Business Is Charging Up
A comprehensive report by Taglich Brothers lists several reasons to expect substantial price appreciation. Their analysis also supports a surge in KULR's share price to $4.50 by the end of this year. From current levels, that's an expected 119% increase in price. A more bullish expectation is for KULR to triple its comparative 2021 year-end revenues.
The optimistic sentiment appears well-warranted, especially with KULR increasing its client count and benefiting from the two special permits noted. Moreover, its current list of clients is a "who's who" in business, with NASA, battery manufacturer SAFT, a Total Company (NYSE: TOT), Andretti Technologies, and Lockheed Martin (NYSE:LMT), a few of its notable clients. And having these massive industry-leading clients isn't by accident. Each needs KULR's expertise when it comes to lithium-ion battery safety technology. NASA even took the technology to Mars, utilizing its carbon fiber thermal management solutions on Mars Rover Perseverance 2020. That's a substantial validation.
Things are going well on earth too. A potentially enormous windfall could come through the FAA, which KULR noted is evaluating its technology for in-flight applications for its effect to mitigate ion-battery malfunctions. In simpler terms, utilizing its technology to help eliminate fire and explosion.
And from an agency that mandates safety, going as far as requiring specific seat and aisle width, adding a measure to mitigate in-flight explosion and fire may be high on its list of priorities. That should be an incredibly compelling consideration when the technology's implementation cost is near inconsequential to manufacturers. Retrofitting current aircraft is also not anywhere near cost-prohibitive.
The great news on that front is that KULR could have the balance of regulatory favor tipping in its direction by showing near irrefutable proof that its technology can substantially reduce the risk of fire and explosion. And in aircraft, where the use of lithium-ion batteries is substantial, the necessity to mandate available safety solutions is too big to ignore. Know this. If the FAA requires the KULR technology, it's fair to expect an exponential increase in shareholder value. That could likely happen within minutes of the update.
Best of all, don't expect many others to even have a chance to poach on the opportunity. Not many others, if any, can do what KULR can do. And with its battery safety technology recently earning a third patent covering its Thermal Runway Shield (TRS) technology, few will get the chance.
That IP, by the way, provides extensive product and marketing protections covering its passive propagation resistant solutions as well. Those awards came after KULR technology showed a compelling ability to reduce the hazardous risks associated with thermal runaway in lithium-ion battery packs. On a licensing basis alone, the IP is likely worth more than its entire market cap today.
Far-Reaching Strategy And Applications
Still, while its IP is valuable, don't discount KULR's revenue-generating deals already in play. They are substantial and driving triple-digit growth. Still, as good as they are, KULR is rumored to be working on a deal that would transform its future.
Although KULR didn't provide a name, they alluded to a potentially massive agreement with a leading supplier of electronic components in smartphones. Of course, cell phone users often don't consider their devices a walking time bomb. However, for those that want to see the danger, Google "exploding phones" to see why manufacturers are interested in KULR's technology.
And with hundreds of millions of consumer products in play, including phones, tools, and household appliances, the revenue-generating potential from that market can be near astronomical. Better still, that potential revenue tsunami still doesn't include KULR's smart-battery market opportunities targeting the $127 billion drone sector. That market also adds tremendous firepower to the value proposition.
And while it may appear that KULR is getting stretched thin, its recently enhanced facilities provide them 4X the space to take advantage of these diverse opportunities and keep focused on its core competencies. Hence, there is ample room to grow.
Diverse Market Momentum
And they are doing that now. In addition to the deals mentioned, KULR is also working with the Marshall Space Flight Center, evaluating a dual-use opportunity to integrate its technology into 3D-printed battery systems for manned and robotic space applications.
Further deals include development programs with Leidos and Lockheed Martin to develop hypersonic and directed energy defense applications. There's also an expansion of its agreement with Andretti Technologies to co-develop and co-market battery and safety technologies to automotive partners for mass-market EV applications. The opportunity there can be substantial.
Most recently, General Motors (NYSE: GM) said it is investing more than $35 billion toward EV and autonomous car production. Of course, that adds to a growing list of EV companies, including sector pioneer Tesla (NASDAQ: TSLA).
Still, it's just one of many reasons to like KULR as a company. But, it does expose the massive value disconnect between share price, intrinsic, and inherent value.
Undervalued From Being Under The Radar
Some say that the share prices always tell the truth. That's a misleading exaggeration. The fundamental matter of fact is that most of the time, investors either don't know or are unwilling to spend the time finding that truth. That appears to be the case with KULR.
But a simple fact finding exposes the disconnect. Missing from its share price- the value earned from surging revenues, high double-digit percentage growth in gross profit, a top-tier client base, and having the strongest balance sheet in its history.
Also missing is the value from doing business in multiple billion-dollar markets, seizing opportunities beyond those in the battery safety and protection space, and the chance to have its technology included in everything from battery-operated phones to hypersonic missiles.
Taking it a big step further, the value inherent to KULR having a competitive stranglehold on competition from a well-fortified IP portfolio is also missing. In short, KULR's value proposition speaks for itself.
Investors just need to pay attention to the story KULR is telling. Today's an excellent day to start.
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