Dragonfly Energy (NASDAQ: DFLI) shares may be priced at smallcap levels, but don’t be misled- this company is doing some crucial things to create a pathway for battery independence for the United States and potentially its allies. And that points to one thing: at $1.97 on Wednesday, its valuation ignores the most basic intrinsic values deserved. That’s appraising just what’s in its portfolio.
Factoring in the inherent value, especially related to how it positions Dragonfly Energy to contribute to an urgent cause, the valuation disconnect presented exposes an opportunity to take advantage of one of the most potent smallcap clean energy plays in the market. That’s not an exaggeration when considering its 55 filed and pending patents safeguarding its leadership position and, as important from an investor’s perspective, helping to draw attention from investors wanting exposure to potential windfalls generated from serving the booming clean energy and EV sectors.
Remember, IP can be monetized, too. And with DFLI having a lot of it, it could fuel increases to an already appreciating revenue stream.
Rev-Gen Momentum At DFLI’s Back
The momentum is evident in DFLI earnings. For its year-end 2022, Dragonfly delivered solid growth, with its OEM segment growing by more than 300% YoY, representing approximately 39% of total sales, compared to roughly 11% in 2021. Growth continued through Q1 2023, with DFLI posting net revenues of $18.8 million, higher by 2.7% over the same period last year. For its bottom line, DFLI scored net income of $4.9 million compared to a net loss in Q1 2022. Don’t underappreciate that percentage growth. Rising revenues and a strengthening bottom line in any measure are impressive in the current economic environment.
Moreover, that growth is evidence that clients need what DFLI is selling. And that demand can come from major sector players, including from the growing pack of EV sector players like Tesla (NASDAQ: TSLA), Ford (NYSE: F), and General Motors (NYSE: GM), who are looking for best-in-class power alternatives to mitigate continued squeezing of production margins.
Dragonfly can certainly answer their call, leveraging over a decade’s expertise in developing intellectual property focused on lithium-ion cell manufacturing. As importantly, their work is well-recognized, resulting from its energy source innovations revolutionizing an industry by making lithium-ion batteries more accessible to niche markets. That attention is expected to get more pronounced as its direct-to-consumer business segment earns more sales traction, a trend in progress.
Vital To An Energy Supply Chain
While strong today, expect the trend line to steepen, resulting from soaring demand for clean, renewable energy and the need for clean power to fuel a booming electric vehicles market. For DFLI, that demand is doing more than exposing near-term opportunities; it’s also showing that it’s more critical than ever for companies to have a competitive and protected advantage in a sector where innovation, performance, efficiency, and sustainability matter. The excellent news for Dragonfly investors is that they check all those boxes.
Better still, they are positioned to answer what’s becoming a desperate call to mitigate growing dependence on batteries produced by foreign sources. That secret is out of the bag, with supply chain disruptions in 2022 exposing how significant the U.S.’s reliance on imported batteries has become. Not only did COVID-related disruption affect supply and pricing, but it also provided an alarming wake-up call for the U.S. and its allies to proactively protect against future and similar disruptions. Simply accessing the market won’t be enough. Those who genuinely want energy independence must align with the companies that can provide it. DFLI checks that box as well.
As a leading manufacturer of deep-cycle lithium-ion batteries, DFLI is vital to helping ensure that developing a robust battery supply chain in the U.S. is more than an ambitious mission statement but a program in progress. This is where being better matters, a claim that DFLI can confidently make. That statement can go beyond saying its batteries are safer, more efficient, and more potent than current lead-acid options; they can boast its batteries’ design and assembly are completed in the United States. Most of its competitors can’t say the same.
Dragonfly U.S.-Based Production Serves Diversified Demand
There’s more to appreciate than being homegrown. Dragonfly’s contributions are adding to research and development initiatives that highlight its non-toxic deep-cycle Lithium Iron Phosphate (LiFePO4) battery technology that is replacing lead-acid batteries across a broad range of use applications, including RVs, marine vessels, residential off-grid and backup storage, and industrial applications. Leading the market penetration, in part, is its innovative deep-cycle battery, the 270Ah 12V GC3, sold under the Battle Born Batteries brand. Its differences are so good they earned patents for technology and design.
In fact, Battle Born battery differences are advantages that serve the need to replace the millions of lead acid batteries that have flooded the markets over the previous decades. Unlike competing lead-acid alternatives, Dragonfly and its branded Battle Born batteries are environmentally safer, provide 2-3 times more power, last over ten times longer, are one-fifth the weight, charge faster, and require no maintenance. That’s game-changing, and as important from a company and investor perspective, they are selling.
That’s not surprising, knowing that changing to a Battle Born battery isn’t difficult due to DFLI’s battery pack design allowing for seamless installation inherent to its flexible form factor. The battery is so innovative that it has been instrumental in shifting the RV industry standard to lithium. It spurred that change by offering increased energy density in a unique form factor. This has helped the GC3 gain popularity with installers serving overland, off-grid properties, and auto trailers. It’s an excellent choice. Here’s why.
Dragonfly’s BBGC3 utilizes the stable LiFePO4 chemical composition in cylindrical cells and the same advanced built-in battery management system technology found in other Dragonfly Energy products. In addition to better design, performance is impressive, providing 270Ah of power, making it ideal for a wide range of applications. Another advantage compared to alternatives is that the BBGC3 can be discharged to a 100% depth and charge up to five times faster than lead-acid batteries, highlighting its superior energy efficiency. Moreover, the battery’s lifespan is designed to last between 10 and 15 years and is backed by an industry-leading 10-year warranty.
Battle Born contributes just a part to the DFLI value proposition.
DFLI Markets Best In Class, Lead-Acid-Free Power Sources
Marketing through its Dragonfly brand, DFLI is further accelerating its pace of making its deep-cycle lithium-ion batteries mainstream to EV and off-grid users. The Dragonfly Energy brand serves its Original Equipment Manufacturing (OEM) customers and partners. One is with the industry-leading recreational vehicle manufacturer THOR, a relationship that led to a strategic investment of $15 million into developing additional Dragonfly technologies. That’s not all driving revenues higher.
Additional income is generated from being designers and resellers of accessories, effectively making DFLI a total system integrator for its customers. That scope was enhanced after acquiring Wakespeed Offshore in 2022, which facilitated Dragonfly to better integrate its storage systems with vehicle engines and alternators. Combined with battery pack monitoring and communication innovations, it sets the 2H/2023 stage for appreciable growth inherent to DFLI’s focus on capitalizing on and maximizing revenue-generating opportunities that larger stationary storage applications present. It’s made DFLI a more prominent provider faster than many may have expected.
Today, Dragonfly is recognized as an expert in lithium-ion batteries and entire lithium battery storage systems. That’s earned value from having a robust patent portfolio continually strengthened by innovation, including Dragonfly’s dry powder coating cell manufacturing technology and non-flammable battery technology.
An Attractive And Compelling Proposition
All tolled, the sum of DFLI’s parts presents a compelling investment proposition for growth stock investors looking for undervalued opportunities. And not only for its near-term prospects but long term, the likely result of DFLI strengthening its market penetration and finding ways to monetize its potent IP portfolio. Yes, smallcaps have been getting bruised, with the large-cap NASDAQ players hiding a backdrop of weakness for their less valued brethren. But that’s not necessarily bad news.
Unprovoked weakness exposes opportunities. To their benefit, savvy investors who recognize the revenue-generating potential inherent to companies with both product and IP strength generally score the more impressive returns. Dragonfly Energy presents such an opportunity. By checking the right boxes, including revenue growth, diversification, and meeting surging demand, it may be one too good to ignore.
Disclaimers: Shore Thing Media, LLC. (STM, Llc.) is responsible for the production and distribution of this content. STM, Llc. is not operated by a licensed broker, a dealer, or a registered investment adviser. It should be expressly understood that under no circumstances does any information published herein represent a recommendation to buy or sell a security. Our reports/releases are a commercial advertisement and are for general information purposes ONLY. We are engaged in the business of marketing and advertising companies for monetary compensation. Never invest in any stock featured on our site or emails unless you can afford to lose your entire investment. The information made available by STM, Llc. is not intended to be, nor does it constitute, investment advice or recommendations. The contributors may buy and sell securities before and after any particular article, report and publication. In no event shall STM, Llc. be liable to any member, guest or third party for any damages of any kind arising out of the use of any content or other material published or made available by STM, Llc., including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Past performance is a poor indicator of future performance. The information in this video, article, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. STM, Llc. strongly urges you conduct a complete and independent investigation of the respective companies and consideration of all pertinent risks. Readers are advised to review SEC periodic reports: Forms 10-Q, 10K, Form 8-K, insider reports, Forms 3, 4, 5 Schedule 13D. For some content, STM, Llc., its authors, contributors, or its agents, may be compensated for preparing research, video graphics, and editorial content. STM, LLC has been compensated up to ten-thousand-dollars cash via wire transfer to produce and syndicate content for Dragonfly Energy, Inc. for a period of two weeks ending on 04/14/23. Please read the full disclaimer at https://primetimeprofiles.com/disclaimer/ for important information about this content.
As part of that content, readers, subscribers, and website viewers, are expected to read the full disclaimers and financial disclosures statement that can be found on our website. The Private Securities Litigation Reform Act of 1995 provides investors a safe harbor in regard to forward-looking statements. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, goals, assumptions or future events or performance are not statements of historical fact may be forward looking statements. Forward looking statements are based on expectations, estimates, and projections at the time the statements are made that involve a number of risks and uncertainties which could cause actual results or events to differ materially from those presently anticipated. Forward looking statements in this action may be identified through use of words such as projects, foresee, expects, will, anticipates, estimates, believes, understands, or that by statements indicating certain actions & quote; may, could, or might occur. Understand there is no guarantee past performance will be indicative of future results. Investing in micro-cap and growth securities is highly speculative and carries an extremely high degree of risk. It is possible that an investors investment may be lost or impaired due to the speculative nature of the companies profiled.
