Challenging markets can be painful to portfolios. But, they also expose opportunities, especially in good companies whose stocks are more badly bruised than deserved. KULR Technology (NYSE-Amer; KULR), $KULR) is an excellent example. This company has been doing just about everything right. They have created best-in-class battery safety technology, inked deals with several of the world’s largest conglomerates, and fortified its balance sheet to weather what was an unprecedented time for business. Now having weathered that storm and looking at flat revenue as a result of that time, investors may be better suited to look at KULR from a forward-looking perspective.
Frankly, they should. KULR provided decidedly bullish guidance during its recent Q2 call, inspiring investors to send higher shares by more than 26% in August. But, a market sell-off interrupted that rally, shrinking gains to about 5% for the month. Still, holding a 5% MTD gain isn’t bad news. In fact, it shows that investors are cautious about giving up too much of their positions, especially with KULR showing it’s best positioned compared to any time in its history to capitalize on multiple and potentially massive revenue-generating opportunities.
That’s a timely strategy. KULR noted investing significantly in research and development, facility infrastructure, SG&A, and assembling a high-caliber workforce over the past year, saying those initiatives are expected to translate into near-term customer sales, some coming as early as Q3. But that’s not all KULR said. They added that they are on the precipice of reaching an inflection point, and with KULR historically delivering on stated goals, not paying attention to that comment, or taking advantage of an apparent valuation disconnect, could result in leaving money on the investment table.
Investments Strengthen KULR
Its recent strategic investments prove that taking advantage of a weakened share price could be a wise and timely consideration. Those investments in its operational infrastructure accelerated the build-out of its holistic, total battery safety platform providing customers with an extensive set of solutions to achieve battery sustainability within their respective ecosystems. In addition, those investments have opened the door well beyond its revenue-generating focus of 2021, putting multiple sources of income into play after expanding its go-to-market efforts by up-selling and cross-selling the individual components of its comprehensive platform through a product sales or subscription model.
That strategy is designed to enhance its ability to attract and keep customers for the long term. It also helps rejuvenate legacy contracts and make new customers long-term value drivers. Moreover, the enhanced revenue-generating strategy can provide rapid revenue growth and sales visibility, which provides investors and analysts a road map to more appropriately value KULR stock. And those revenues could grow faster and higher than many think.
That results from KULR leveraging the strength of its holistic platform to penetrate potentially lucrative untapped sectors and markets. Remember, there are plenty of markets where KULR technology is a value-added feature, which has led to customer contracts and interest across several verticals, including energy storage, battery recycling, electric aviation, industrial and power tools equipment, and e-mobilities. KULR highlighted that all tolled, it can target significant revenue-generating opportunities from over 300 enterprise and government organizations. They noted that sales from that focus are already reaching the revenue pipeline.
Partnerships With Global Business Giants
That could result in KULR beating its bullish forecast. Factoring in easing macro-economic pressures and potential deals created as a result of a new spending bill, that’s a more probable proposition than not. Also, while new customers are targeted for 2H/2022, its legacy deals also benefit from follow-on orders, with Lockheed-Martin (NYSE: LMT) adding to its prior demand for its space-developed phase change material (PCM) heat sink technology.
And they aren’t the only global business giant doing business with KULR. NASA, Andretti Enterprises, Leidos (NYSE: LDOS), and others are also taking advantage of KULR’s best-in-class battery safety technology. But that’s just naming a handful. Combining market opportunities from all its clients, up to billions of dollars are in the revenue-generating crosshairs. Moreover, considering KULR is a valuable contributor to and enabler of the emerging circular electrification economy, earning its dollar share of that massive market may come faster than many expect.
Frankly, that’s happening. KULR’s recycling partner already provides immediate and open access to commercial partners and customers after securing United Parcel Service (NYSE: UPS) shipping certification. That certification allows for the shipment of batteries utilizing the KULR Safe Case products through UPS’ vast shipping network. It does more. The permit also 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. That allowance provides KULR’s major recycling partner a safe shipping container that can handle batteries above 300Wh. For KULR and its partner, demand could be substantial, noting that billions of batteries need to be disposed of in an environmentally friendly and compliant manner.
That’s more to like.
Expanding Growth And Clientele In Q3
KULR revenues could get a quick boost from completing the licensing and starting the construction of its Fractional Thermal Runaway Calorimetry (FTRC). KULR guided to having multiple customer engagements already in queue and three purchase orders expected to close in September 2022. Accounting for those, new revenues as early as the start of Q3 could help fuel increases to analysts’ already bullish price targets. There’s more for analysts to model.
KULR announced securing four additional major commercial accounts for its Safe Case products. Deployment trials are underway, and if all goes as expected, several multi-million-dollar recurring commitments will be in play starting as early as Q4. Additionally, KULR highlighted the near-term potential of its biosensing solution for its Fortune 50 Metaverse customer, saying in its earnings call that its recently revised engineering design improves pliability, increases conductivity, and enhances softness to the skin. The next shipment from that deal is expected in late August 2022, with customer testing to occur shortly after that.
Other value drivers are also near-term accretive, including its partnership with E-One Moli Energy Corporation to advance its total battery safety and thermal management solutions strategy. And more value may have to be factored in after the installation of a fully automated battery testing program with an initial processing capability of roughly 500,000 18650/21700 lithium-ion cells annually in support of NASA’s manned flight specification EP-WI-037. That system installation is scheduled to conclude in Q3 2022, with full capability processing beginning in Q4 2022. Once completed, screened cell capacity will be allocated to NASA and the United States Department of Defense battery cell deployments, including internal requirements related to KULR’s qualified commercial cell deployments.
Ready To Surge In Q3
Bottom line: KULR is doing the right things in the right markets at the right time to generate significant near and long-term revenue growth. It can also protect that growth, with an impressive IP portfolio able to keep competitors at a distance. In some cases, KULR can literally own the markets they serve.
Moreover, while KULR is making barriers to entry exhaustive, its commitment to developing a universal modular battery product by combining its PPR technology and CellCheck for E-mobility, enterprise energy storage, data center, and crypto-mining applications could make the competitive landscape nearly impenetrable. And for those liking investment exposure to companies that can do more than penetrate new markets; they can instead dominate them, KULR may be ripe for consideration.
Best of all, KULR is providing the ammo to make its case that investment consideration is more than attractive; it’s compelling. And reading between the lines of partnership performance, having multiple shots on massive revenue-generating goals, and being better positioned than ever to capitalize on and maximize near and long-term opportunities makes investment consideration another thing that shouldn’t be ignored- it’s timely.
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