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KULR Technology Analyst Models 324% Upside Target As Contracts With NASA, Lockheed Martin, And Other Global Business Giants Accrue Into 2022 ($KULR)
KULR Technology Group (NYSE-AMER: KULR, $KULR) stock appears to be catching a bid. And at current prices, a correction to the upside is long overdue. In fact, don't be misled by the $KULR share price; this next-generation lithium-ion battery safety and thermal management technologies company is doing everything right in the right markets at the right time to create massive shareholder value. And with revenue-generating momentum into 2022 after having its best year ever, having contracts with the world's largest aerospace and defense companies, and a balance sheet that can accelerate growth, the record-setting performance in 2021 is likely a precursor of better things to come. In fact, KULR's guidance suggests that's the likely scenario.
They point to reasons why. Foremost, optimism comes from being able to see behind the scenes of an industry in need. Moreover, they already know what others are just now seeing; the risk of fire and explosion inherent to lithium-ion battery use is getting too big to ignore. And not just in the consumer products markets, including cell phones, laptops, battery-powered skateboards, and leaf blowers.
Battery safety integrations in other markets are equally important, and they, too, put multi-million dollar income potential into KULR's crosshairs. But here's the best news. KULR isn't a small-cap company hoping to land big deals; they already have. In fact, current clients include NASA, Lockheed Martin (NYSE: LMT, $LMT), Johnson Controls, Leidos (NYSE: LDOS), and the Andretti United E Team racing group. But that's just the shortlist.
Other clients are part of a Who's Who in an industry lining up to test and potentially integrate what KULR is selling. And for good reasons.
Video Link: https://www.youtube.com/embed/cqFtv-RjT0I
Lithium-Ion Battery Safety Technology Is An Explosive Subject
They know that KULR technology and products can be critical to lithium-ion battery safety. And while its client list is impressive today, it's likely to get significantly larger as global populations and companies turn more toward green energy faster than ever. Moreover, while the EV sector may be the one earning most of the headlines, they are just one part of a global shift in how power is created and generated.
And the one thing that is becoming more common to the entire group is videos of fire and explosions resulting from battery malfunctions and defects. With billions of dollars worth of product reputation at stake, don't think these companies aren't considering KULR technology in its build. In fact, the decision to do so may no longer be a luxury but a necessity.
Tesla (NASDAQ: TSLA, $TSLA) may even take the lead, and rightfully so. They expect to produce 20 million vehicles by 2035. And they are just one of more than twenty manufacturers now contributing to the sector. What's the common thread between them? Batteries. And each knows quite well the risk associated with thermal runaway, the primary cause of battery fires. Moreover, since they know, and if they don't work proactively to prevent potentially catastrophic events, they could face liability.
Just as important, integrating safety technology protects consumers and brands. Thus, with safety an issue, and even where government mandates are likely to become a factor in technology adoption, KULR is more than in the right markets at the right time; they are leading them. And that position could earn them a massive share of the multi-billion dollar combined market opportunities.
Already, KULR battery-safety technology is reaching into multiple sectors. Working with NASA, KULR has and continues to design innovative, IP-protected systems to monitor, package, protect and prevent battery systems from "thermal runaway." And as systems become more complex and a growing number of NASA products use batteries as their primary source of power, KULR's relationship with NASA could lead to potentially exponential revenue growth from that interest alone.
But while an obvious massive opportunity, it's still one of many.
Sector Integration With Limitless Potential
The entire consumer, defense, and government business markets are in play. And considering that products from hoverboards to hypersonic missiles, and everything in between, are utilizing high-powered compact battery design, it's a market that won't slow anytime soon. On the contrary, the speed at which lithium-ion power has become mainstream, coupled with aggressive initiatives to shift to an “all-green” economy, makes the KULR battery-safety proposition even more compelling.
Remember, these markets can't continue to grow unchecked. Actually, they aren't. The United States Coast Guard recently announced new safety requirements for the passenger vessel industry and provides additional battery safety options for the cargo, fishing, and cruise verticals. KULR is targeting that market with its KULR-Tech Safe Case enclosure preventing cell to cell thermal runaway propagation and deterring excessive heat, fire, and explosion. And it could become the go-to first-to-market product meeting the USCG requirements.
Better news for KULR and its investors, it could be the only option on the market that provides passive propagation resistant ("PPR") solutions for maritime lithium-ion battery safety. Thus, in addition to KULR's broader market opportunities getting substantially more significant, they could potentially corner the market in that marine application.
Also, its deals with NASA, Lockheed Martin, and other industry giants could help establish the framework for safety regulations and protocols that set the benchmark for monitoring, recycling, transporting, and disposal of batteries. If that's the end result, expect KULR to transform from a roughly $2.5 million in sales company into a revenue-generating juggernaut. That's not an overzealous presumption, either. KULR is already on that path.
KULR Enters 2022 With Rev-Gen Momentum
In fact, KULR is in hyper-growth. Its Q4 revenues increased by 267% to $766,000 compared to a year ago. Growth was equally impressive for the entire year, with income surging 287% to $2.4 million in 2021 from $624,000 in 2020. Better news, KULR guided for revenue growth to continue, with early success in penetrating the energy storage, battery transportation, and recycling sectors continuing to gain revenue-generating traction.
Moreover, KULR is leveraging its business tailwind with its $14.9 million in cash reported at the end of the last quarter. KULR recently announced a three-year multi-million-dollar deployment order for its PPR solution suite from Volta Energy Products, a subsidiary of Viridi Parente, Inc. The PPR solution, which includes the patented thermal runaway shield ("TRS") product, will be used for Volta's stationary and mobile lithium-ion battery power systems. The initial deployment order totals approximately $1.6 million for immediate delivery, with higher volume shipments expected throughout 2022. Thus, that deal alone equals more than half of all 2020 revenues.
Another boost should come from new revenues after acquiring the patented intellectual property rights from Centropy AB. That deal brings advanced carbon fiber-based heatsink technology for HPC applications, strengthening its thermal management solutions for cloud computing, AI, and crypto mining applications. Moreover, with accretive integration, Centropy's cooling solutions can be quickly combined into KULR's existing technology portfolio and extend its business services reach to include air and liquid-cooling of HPC applications such as crypto mining, cloud computing, and AR/VR simulations. Thus, revenues from that acquisition can come sooner than later from markets that also provide billion-dollar shots on goal.
That's not all.
Setting All-Time Performance Records
Also adding to the 2022 revenue stream is an initial order from Lockheed Martin totaling approximately $500,000 for its PPR battery systems. Like its deal with Volta, this one too is front-loaded, with the initial order set for immediate delivery and the starting point in the partnership as LMT leverages KULR's technological advancements in PPR energy products for its Advanced Energy Systems. There's still more to like.
KULR also expanded its services with Heritage Battery Recycling due to HBR's merger with Retriev Technologies, creating the largest lithium-ion battery recycler in North America. That expansion adds to the existing e-bike and scooter customer programs, positioning KULR with ample sales opportunities from providing safe transportation logistics to Retriev's battery collection operations in North America.
Of course, that should tie in nicely with KULR joining Clarios in the U.S. Department of Energy's lithium-ion battery lifecycle initiative to develop the manufacturing and reuse of lithium-ion batteries and their chemical elements in the United States for the purpose of domestic national interest. In other words, battery safety is a hot topic from the private sector to the public interest, and moreover, that discussion is generating real-time opportunities for KULR.
Analysts at Litchfield Hills Research Group certainly appear bullish on KULR's potential.
Analyst Puts $7 PT On KULR Stock
They recently updated research that suggests KULR shares are significantly undervalued and set a 12-month price target of $7 per share. Their bullish thesis is based on the discounted value of future earnings and its valuation relative to comparable firms in the industry. Moreover, it's supported by an expected surge in revenues over the next twelve months, which they think may lead to a tightening of the valuation disconnect. KULR is doing its part to make that happen, with initiatives and expenditures in Q4 setting up 2022 to be its best year in history. They're off to a great start, with updates suggesting that KULR may have already booked sales close to 2020 revenues in Q1 alone.
And with a significant amount of Q4 investment accretive to Q1 and all of 2022, the bullish revenue trend is expected to continue. Keep in mind that those expenses included an aggressive expansion of its workforce, strengthening its infrastructure, and an ambitious R&D and sales pipeline accretive to current and future quarters' bottom line.
Knowing that companies don't tend to significantly increase its workforce without reason could be a clue to expect another blowout quarter, with Q1 potentially the first of four new record-setting reports in 2022.
Sum Of Its Parts Equate To Rally Time
Indeed, KULR's sum of its parts indicates that should be the case. The value from several current revenue-producing contracts alone justifies a claim for prices substantially higher than its current $1.67 mark. Remember, KULR is better positioned today than when it traded at its 52-week high of $3.65. Thus, despite a painful sight for long-time investors invested at higher prices, they should take comfort knowing that KULR is in its best operating position in history and supported by a strong balance sheet to recover from recent weakness and eclipse all-time highs.
Frankly, the company is ideally positioned to do so. For new investors, though, current prices present an opportunity that is simply too good to ignore. And for them and investors wanting to average, investment consideration is more than timely; it's compelling.
Hence, in a market where revenues can drive share prices appreciably higher, trading ahead of an expected blowout quarterly report from KULR may be a wise consideration. Further, understanding that KULR's intrinsic value justifies a significantly higher share price, topline growth could fuel deserved appreciation. And that's expected.
Thus, totaling KULR's intrinsic value with its inherent potential from its contracts with several of the world's largest companies, KULR's share price can be described as massively undervalued. However, just like the battery-safety solutions market is getting too big to ignore, so, too, is the KULR value proposition. And once noticed and seized upon, that wide-open window of opportunity will likely close quickly. By the way, that's already starting to happen.
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