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KULR Technology Group Shares Surge 12% After Preliminary Financials Show 269% Revenue Increase And A 56% Surge In Gross Profits; Guides For Accelerated Growth In 2H 2021 (NYSE-AMER: KULR)
KULR Technology Group's (NYSE-Amer: KULR) shares are spiking by 12% after the company posted preliminary earnings that show its record-setting pace of growth is intact. KULR expects to report substantial growth, with a more than 269% increase in comparative revenues and a 56% increase in gross profits. Moreover, KULR expects its revenue-generating momentum to continue through the back half of this year and well into 2022. Hence, despite its 12% jump over the past few days, the stock still represents a more than compelling opportunity at its current $2.29 level. And with analysts at Taglich Brothers modeling for a $4.50 share price in the coming months, a more than 96% leap from today's levels gain could be in play.
The more excellent news is that revenue contributions are coming from throughout KULR's diversified battery-safety technology portfolio. They have expanded their business reach by working with NASA, Andretti Enterprises, Marshall Space Center, and Lockheed Martin. And those collaborations put KULR in a position to advance its technology into everything from consumer EV batteries to hypersonic missiles. Still, that's only four of many big-name clients.
KULR is looking to add an even bigger one by exploiting massive opportunities in the consumer products sector with a deal that could have enormous positive implications for the company.
Although KULR didn't provide a name or specifics just yet, a recent presentation alluded to a potential agreement with a leading supplier of electronic components in smartphones. What could a deal like that entail? Well, to start with, KULR would earn the potential to include its technology into more than a billion mobile phones a year, rows of consumer products at hardware stores, and inclusion into just about every other product using lithium-ion batteries. Of course, this wouldn't happen overnight. But, with KULR's technology well-protected with multiple patents, they would have the time to develop each market opportunity. Undoubtedly, the results could lead to exponential growth for KULR and its share price.
Still, while all of the above present a more than compelling investment proposition on a valuation basis, it still doesn't include the potential from its smart-battery market opportunities targeting the $127 billion drone sector. A deal in that sector, on its own, would help dwarf the current $211 million market cap.
Best of all, these expectations are not all that forward-looking. KULR is already generating substantial revenue growth by touching all of these markets today. And business momentum is at its back.
Video Link: https://www.youtube.com/embed/GSJ3SYn_3wY king Triple-Digit Percentage Growth Into 2H 2021
In fact, KULR's pace of growth is on an upswing. And its consecutive quarterly growth is rightfully attracting attention, especially with KULR expecting to post a roughly 200% increase in comparative Q2 revenues and a more than 269% surge over the same six-month period last year. Add to that a cash position of roughly $12 million on June 30th, which is approximately 1482% higher than it was at the same time last year, it's logical to conclude KULR is better-positioned than ever to maximize market opportunities during the next 3-6 months. The longer-term proposition is even better as KULR can leverage its short-term milestones reached and turn them into catalysts.
Also notable to the investment proposition is that insiders are fully aligned with common shareholders. Current reports show KULR insiders holding roughly 40% of the shares outstanding. Its move to the NYSE-American exchange added some institutional hands to that equation, closing the public float to about 52 million shares. That's an impressive and relatively low number considering that the company just completed a capital raise that keeps them financially nourished through 2022.
Moreover, investors need to consider KULR as a moving vessel that adds value through milestones reached. And those met with NASA, Andretti, Lockheed Martin, and others have a cumulative effect on future deal-making opportunities. Simply said, KULR can leverage current deals to create new ones, noting that its technology is necessary and universal to the entire lithium-ion battery sector. In fact, its collaboration with Andretti Technologies is focused on massive opportunities in the EV sector, seeing a surge in interest from General Motors (NYSE: GM), which is trying to keep pace with industry pioneer (NASDAQ: TSLA).
That ability, as noted, is helping lead to sharp increases in revenues.
Banking On a Tripling of Revenues
Earlier this month, KULR published preliminary earnings expecting its quarterly revenues to more than triple to $620,000 compared to the same period in 2020. Gross profit followed along like it should, expected to jump by 16% in the same period. And give credit where credit is due. KULR posted this impressive quarter during one of the most unprecedented and challenging periods in business history, with pandemic-related obstacles nearly shutting down commerce through clogged logistical channels and supply-chain shortages. That makes its six-months results significantly more impressive as well.
In the eye of the storm, from January 2021 to June 30th, KULR still showed its industry worth, with clients in line to get its technology. KULR expects to post a roughly 269% increase in revenues up toward $1.03 million during that period. Here's the exciting part. If that is indeed the number, and knowing that Q2 will post roughly $620,000, the back half of this year is likely to add at least another $1.24 million in revenues.
And that's assuming no growth, which is unlikely with markets and logistical channels returning to a more normalized function. Its growth is also on pace with another part of Taglich Brothers' target, aligning with an expected tripling of revenues by the end of the year.
Gross profits also get props, with its 1H 2021 totals expected to generate a more than 56% surge to $320,000. Thus, the growth trend is a comprehensive contribution. It comes from increasing client counts, higher revenues, higher margins, and collaborative efforts that could open tremendous new market opportunities that leverage the global brands of its partners.
And for those that trade on visibility, KULR's guidance is straightforward. They are on record saying that strong year-over-year revenue growth is expected to continue and is potentially strengthened by targeting mass-market applications, scaled-up manufacturing, and its widening client base in adjacent markets. Of course, the best news is that while KULR is stretching its market reach, it happens through a seamless connection that utilizes the accretive marketing nature of its established battery safety and thermal management products. In other words, signing new clients doesn't start the R&D processes over.
A great example of how they can extend its revenue-generating without substantial or any capital exposure happened last month.
Department of Transportation Special Permits
In July, KULR was awarded two special permits by the Department of Transportation to transport and dispose of lithium-ion batteries. It's not a simple permit to get, either. KULR earned it from having the means and technology to contribute to an environmentally safe method of transporting lithium-ion batteries for recycling and end of battery life disposal.
The better news is that KULR is already monetizing those assets, saying that its special permits are generating significant interest and revenue-generating traction from current and potential clients needing safe and compliant shipping and disposal solutions. The guidance adds further bullish expectations, with KULR expecting increased market penetration in the space in subsequent quarters.
Still, there's more to like about KULR. And its position to capitalize on diverse market opportunities has never looked better.
Massive Opportunities Through Global Client Giants
Indeed, the case for KULR stock appreciating as the result of its client connections is overwhelmingly strong. After all, its list is a "who's who" of global players. They already include NASA, battery manufacturer SAFT, a Total Company (NYSE: TOT), Andretti Technologies, Volta, Leidos, and Lockheed Martin (NYSE: LMT).
There are several more in its client portfolio that should not be undervalued, either. And while they are each substantial in size, they all come to KULR for primarily the same reason- they need best-in-class solutions to mitigate risk to billion-dollar assets. The clients listed above expand KULR's reach into aerospace, defense, grid storage. It's doing well elsewhere, too.
A potentially enormous windfall could come through the FAA, which is said to be evaluating KULR's battery-safety technology for in-flight applications. The matter in focus is its technology's to substantially mitigate ion-battery malfunctions. Stated more directly, the FAA is evaluating its power to help eliminate fire and explosion. What happens to KULR stock if the FAA mandates the implementation of KULR technology, which is nowhere near cost-prohibitive? A likely tidal wave of value rushing toward the KULR market cap. That may sound exaggerated, but consider the market and the hoped-for mandate combined. Moreover, the FAA's opportunity to respond favorably to implementing the technology ahead of debating seat space and width could and should become a priority.
Also, the same is true in this market as it is in others. KULR won't need to worry about competitive poaches. It has IP protecting Thermal Runway Shield (TRS) and passive propagation resistant solutions technology, the required ingredients for effective better safety solutions.
By the way, its IP alone has significant intrinsic and inherent value. Don't neglect the substantial opportunities in play on that front. Licensing, partnering, developing, and co-marketing assets are probable scenarios similar to what KULR is doing with Andretti Enterprises. Keep in mind, too, KULR technology provided a compelling demonstration showing its ability to reduce the hazardous risks associated with thermal runaway in lithium-ion battery packs.
Noting the value inherent to its IP portfolio is indeed part of the overall value proposition. Most of all, it's a big and final piece of the KULR investment consideration.
Big Programs And Still Under The Radar
With massive programs and surging revenue growth, one thing may be most evident to KULR's valuation. It's an under-the-radar stock. Make no mistake, though, while not yet tapping into the investor landscape, KULR is known to and working with the biggest and best companies in the world of aerospace, EV, consumer products, and defense contractors. In the long run, that's a much more valued place. And in the short run, it helps show that at current price levels, the markets are missing the near and long-term value in play for KULR.
Connecting the business-generating dots exposes how well KULR is doing. They have top global clients, exposure to massive and diverse billion-dollar markets, best-in-class patented battery safety technology, record-setting revenue growth, and a matching surge in gross profits. Moreover, several markets are in KULR's crosshairs that could be transformative to its near-term future.
Couple that to an IP portfolio that will keep competitors at a distance, KULR is capitalizing and monetizing its agreements and assets to position itself as a breakout star in 2021 and 2022. Indeed, it has momentum on its side and analysts that expect the same.
Thus, at $2.29, shares could be the bargain of the year. Not because they look cheap, but because they are cheap compared to its revenue-generating agreements in play. And that valuation disconnect gets even wider with the deals that are just now or will be starting soon. Of course, factoring in the value of a management team driving substantial and consecutive quarterly revenue growth, the company is locked and loaded for better things to come.
Hence, by no means is KULR's growth accidental. Instead, it's quite intentional. The bottom line - expect more of the same in 2021 and 2022.
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