KULR Technology (NYSE Amer: KULR) stock is soaring in October, up over 72% since the 15th. The better news, at least for those considering the KULR investment proposition, is that from a technical perspective, the bulls appear to be well in control of the movement. Reasons for the optimistic sentiment are warranted. (*price of $1.84 at 5:08 EST on 10/24/22, Yahoo! Finance)
A series of updates, including highlighting its work with the Andretti Racing team, the inclusion of the No. 98 KULR Technology Honda for the 2023 Indianapolis 500®, and follow-on contracts from global business behemoths are indeed helping drive the interest. Still, while an impressive series are feeding investor appetites, there could be more good news ahead, including earnings scheduled to be released in November.
While the future could yield some exciting news, there's plenty supporting the bullish thesis now.
Value Drivers In Play
The latest value driver came as a result of KULR announcing it received a production prototype order for its KULR SafeCase technology, a reusable, safe, high-energy battery transportation, and storage solution. That order came from who KULR described as a "top-tier power tool manufacturer" that is a leading manufacturer in sustainability and safety within the industrial tool and household hardware sectors, as well as an active participant in initiatives around lithium-ion battery safety, transportation, education, and recycling. Speculation is that the deal, like its one made in the metaverse space with another unnamed "global business leader," could lay the foundation for additional near-term add-on contracts.
By the way, those questioning the "unnamed" part of the agreements shouldn't be skeptical of their value. It's not uncommon for companies to maintain secrecy when trying to protect proprietary interests. And because KULR technology could allow client companies to gain a competitive edge from its battery-safety technology, the vagueness of the non-disclosure shouldn't be a concern. Instead, the focus should be on the fact that clients are turning to KULR solutions for a reason, which could be a result of them being best-in-class and, in some cases, the only battery safety technology validated to use in consumer and industrial products.
Remember, too, its technologies are protecting assets worth single dollars to billions of them. Thus, trust by clients who own them further supports that KULR is providing the right solutions to a lithium-ion battery market that is expected to surge. There's a lot portfolio firepower to claim a significant share of that opportunity.
Spotlight On KULR SafeCase Technology
Much of the spotlight has been on KULR's SafeCase technology solution. And rightly so. It's unique in its ability, allowing KULR and its partners to leverage special permits from the U.S. Department of Transportation for the safe shipping of lithium-ion batteries up to 2.5 kilowatt-hours. Moreover, SafeCase is the only known product providing standard and customized case sizes while incorporating a reusable, sustainable, and cost-effective design.
But there's more than design advantages attracting the clients' attention. SafeCase also provides cost-effective warehouse storage for fire safety and transportation and meets specific needs in the commercial lithium-ion battery markets, including providing safety technologies for products using lithium-ion batteries. That includes products from power tools to industrial applications and everything in between. But more than able to meet demand, KULR could dominate some of its market interests.
KULR's patented technology makes them the only known company in the world with a product approved by the DoT for storage and transport of lithium-ion batteries managing up to a capacity of 2.5 kWh for recycled, prototype, and damaged, defective and recalled batteries. That capability opens the door to multiple sector opportunities. Moreover, they are already capitalizing on them.
Leveraging Deal Value From Global Business Leaders
KULR's enhanced deals with the Andretti team are also opening revenue-generating opportunities in the E.V. sector, with its SafeCase and energy management platform a seamless fit to provide battery safety applications in the consumer side of those markets. Those would sell to the sector giants like Tesla (NYSE: TSLA), smaller players like Rivian (NASDAQ: RIVN), and others needing lithium-ion technology to power their products. They may not have a choice.
Remember, millions of batteries will be used to power that sector alone. And it's a safe bet that as more focus is given to potentially catastrophic battery-related events in these vehicles, mandates will be enacted to protect users in both consumer and industrial markets. In the case of battery safety, especially with the massive power encapsulated in small housings, those protections are warranted. And with lithium-ion batteries the critical ingredient to power phones, automobiles, tools, and even trips to space, there's plenty supporting safety advocates' case for having safety measures embedded as part of product development.
If that's the end result, KULR is more than ideally positioned; it can be the leader in providing battery safety and global energy storage solutions to a market expected to reach $554 billion by 2035. That market opportunity won't stop at those levels, either. Worldwide interest in green-energy solutions could make an already hot market opportunity scorching. The better news is that KULR technology can withstand the heat, and if higher revenues generally lead to higher share prices, earn that as a result.
Bullish Trend In Place
Those watching see that's starting to happen. As noted, KULR stock has been surging higher, scoring intra-month percentage gains on Monday that reached 72%. Still, with shares trading at $1.84, they are well below 52-week highs despite being better positioned now compared to that time. And keep in mind that the recent share price appreciation comes on the heels of news, not hype, meaning that while some investors are buying into momentum, most are likely buying into the substance. Both strategies make sense and money, but the latter may be the smartest way to tap into KULR's ultimate potential as they wedge into valuable maritime, defense, aerospace, and recycling markets.
Even better, KULR's revenue-generating opportunities aren't just targeted; they're in the crosshairs. And they present multiple shots at new revenue goals through its suite of innovative technology, providing essential thermal management and safety system technologies to just about any sector in business using lithium-ion power.
That includes government agencies like NASA and the U.S. Department of Defense, two agencies already on the KULR client list. But that list also includes global business giants, including Lockheed Martin (NYSE: LMT), speculation about Meta (NASDAQ: META) being one, and Leidos (NASDAQ: LDOS), to name a few.
Unrivaled Battery-Safety Solutions
Those clients are coming to KULR for good reasons. Foremost is KULR's ability to serve client-specific needs through its highly configurable thermal interface materials. Especially its lightweight heat exchangers and monitoring systems helping to ensure that lithium-ion batteries and the machinery they power can operate efficiently while minimizing the risk of overheating or explosions. Additional market applications include KULR's technologies providing a means for the safe transportation and disposal of these batteries, opening the door to that market potential and exposing the billions of dollars in play there. Remember, billions of batteries need to be disposed of and transported in a compliant way. Throwing them in the trash in an industrial and manufacturing setting won't meet that standard.
But all the above is still only a part of the KULR value proposition. Other value drivers include some that are out of this world, with NASA using KULR's technologies to transport and store laptop batteries on the International Space Station. KULR helps protect those billion-dollar assets with its Thermal Runaway Shield (TRS) technology that effectively prevents battery explosions by protecting against the scorching heat encountered during its deployment to space. NASA has also utilized KULR's carbon fiber thermal management technologies in the Mars Perseverance Rover and their 2017 NICER mission to mitigate the risk of excessive cooling. Earning the repeat business of NASA to protect multi-billion dollar assets is a testament to the importance and efficiency of KULR's technologies. There's plenty more to like.
The NASA-validated technology has a presence on earth as well, with SafeCase the only known product approved by the U.S. Department of Transportation for storing and transporting lithium-ion batteries that can manage up to a capacity of 2.1 kWh for recycled, prototype and DDR (damaged, defective, and recall) batteries. KULR is maximizing a current agreement with Heritage Battery Recycling to supply this technology to safely allow nationwide battery collection and disposal operations.
Acquisitions are also contributing to KULR's value proposition.
Acquisitions Expand Market Interest And Reach
Adding more revenue-generating firepower, KULR recently announced acquiring VibeTech and the subsequent launch of KULR VIBE. KULR VIBE is an AI-driven vibration reduction solution that addresses energy loss from excessive machinery vibration. Excessive vibration is a plague to modern advanced machinery that not only results in the diminished efficiency and lifespan of the asset but can also increase the risk of operator injury. Utilizing a vast database of vibration signatures, the KULR VIBE suite of technologies uses proprietary sensor processes and state-of-the-art learning algorithms to improve machinery balance and forecast component failure. Its AI learning algorithms can locate areas where excessive vibrations cause energy loss, potentially preventing performance and maintenance issues before they become dangerous.
Accretive to its other technology applications, VIBE technology can meet demand from customers across the motorsports industry, aviation, transportation, renewable energy (wind), and manufacturing sectors. It also serves industrial, performance racing, and autonomous aerial (drone) applications with precise balancing solutions by successfully pinpointing areas where excess vibrations cause a loss of energy that can lead to system malfunctions, weakened performance, and maintenance issues. In other words, businesses across the global spectrum in multiple sectors need what KULR sells. That's evident.
Business From Private-Sector Behemoths
They've inked deals with global business behemoths like Lockheed Martin, which just upped its order from KULR for its Phase Change Materials (PCM) heat sink technology. This carbon fiber-infused heat sink uses PCM technology to either provide or absorb heat, extending the life of crucial components used by Lockheed Martin. If all goes well during current evaluations, speculation is that the next contract with LMT could be massive.
It would also add to other private-sector deals like the one with Volta Energy Products, a subsidiary of Viridi Parente Inc. This one is a near-term driver, calling for a multi-million-dollar deployment order of KULR's Passive Propagation Resistant solution suite over three years. Volta raised $95 million to support the creation of "fail-safe" lithium-ion battery technology and plans to market 750 to 1,000 battery storage units in 2022 using KULR's technology. Notably, the companies anticipate that this number could increase to 50,000 units by the end of 2023. Analysis of the deal suggests that if the maximum number is shipped, KULR could score revenues of $40 million during the agreement period. But its been added that if pricing power stays constant, KULR could generate revenues as high as $80 million.
The totality of deals has led to analysts providing bullish commentary with price targets more than 280% higher than current prices. They appear to model KULR's inherent ability to empower battery safety solutions in supercars, space stations, and everything in between. Also, a part of an appropriate valuation includes factoring in that the energy storage and thermal management markets will only become more critical to implement as global green-energy initiatives and regulations get forced on industries rather than only suggested to them. A combination of those events likely factor into Litchfield Hills Research analysts publishing a 2023 stock price target of $7. Since more deals have been done, that bullish forecast could be proven conservative.
KULR Is Doing The Right Things At The Right Time
That's not an overly ambitious sentiment, either. Over the past quarters, KULR has expanded its business presence to include revenue-generating opportunities in the drone, maritime safety applications, enterprise energy storage, and crypto-mining applications sectors. Each has a high demand for energy storage and thermal management solutions. But combined, they represent an opportunity that could drive KULR valuations exponentially higher.
That's a lot of value exposed, but it's still not all. Diversifying interests further, KULR announced its developments within the metaverse sector, where the company is collaborating with a Fortune 50 client, perhaps Meta, as mentioned earlier, to develop a novel biosensing solution. The client's name is currently unreleased, but KULR described its work on the project as a revised engineering design that improves flexibility, increases conductivity, and enhances softness to the touch of their industry-leading client's product. Opportunities presented by the metaverse are quickly capturing the eye of tech giants worldwide. KULR's early involvement in the space with a supporting product could bring substantial interest following a full announcement. Forecasts are for the metaverse sector to reach $5 trillion in opportunities before the end of the next decade.
Thus, no matter where investors look for weakness in KULR fundamentals, the bottom line is that there isn't much to see. KULR has an impressive balance sheet, targets opportunities in global sectors needing battery safety solutions, and is scoring deals with some of the world's most prestigious agencies and companies. That shows more than a growing client list; it's a testament to how vital KULR technology can be for clients and how returns for investors can be accrued sooner than later. But perhaps more than a testament, it's a tell. And what it's telling is that despite the 72% increase in its stock since mid-October, at current prices, KULR shares still look disconnected from a more reasonable and appropriate valuation.
That's led many to believe the gains seen in the past two weeks are something else: the precursor to a more appreciable move higher.
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