For the most part, markets are indecisive headline-driven propositions that change the course of momentum daily. And it's a herd mentality; it only takes one analyst to comment for the herd to follow. However, that herd has a way of over-reacting to a single news byte or topline read. And in doing so often takes even the best of companies lower in the downdraft. KULR Technology stock is an excellent example of how investors can overshoot the downside.
While outperforming many of its Russel Microcap brethren, KULR stock looks to have plenty more fuel to extend its bullish August run. Despite the pullback during a massive three-day decline last week, indicators remain pointed toward the upside being the path of least resistance, which makes sense. During its Q2 commentary, KULR showed why and how it's better positioned than ever for tremendous growth in the final two quarters of 2022 and all of 2023.
But better than just positioned for growth, KULR said that significant revenue-generating opportunities are already in the crosshairs. In fact, that targeted income is expected to hit its books this quarter, with a broader market reach that includes capitalizing on new market opportunities to monetize its best-in-class lithium-Ion battery safety technology.
Best-In-Class Battery Safety Technology
KULR made that its mission, pointing out in its bullish remarks that financial rewards from its expansion efforts are likely to come sooner than later. More to the point, they said that investments made across research and development, facility infrastructure, SG&A, and assembling a high-caliber workforce in the past year put them at an inflection point to drive sales from an expanded customer base. KULR's optimistic sentiment isn't unwarranted.
Strategic investments have accelerated the build-out of its holistic, total battery safety platform, which enables customers to benefit from an extensive set of battery safety and sustainability solutions within their respective ecosystems. The more excellent news from KULR's and investors' perspectives is that those investments have expanded its revenue-generating reach, with multiple sources of income put into play by fortifying its means to up-sell and cross-sell the individual components of its technology through a product sales or subscription model.
It's a new strategy that enhances the old, intended to make potential one-time deals long-term propositions. Of course, from a revenue point of view, turning just its legacy contracts into ones that provide consistent revenue visibility is a value driver itself. It's also an excellent approach to securing new business for extended periods, another value driver that could cause analysts to update their target prices as longer measures of visibility support higher valuation multiples.
In Support Of Higher Valuations
KULR is deserving of that action. In addition to guiding for a considerable increase in near-term revenues from legacy deals, they noted efforts to leverage the strength of its holistic platform to penetrate potentially lucrative untapped sectors and markets. Remember, KULR is targeting the lithium-Ion battery safety sector, one where thousands of products need what KULR is selling. In fact, battery-safety integration isn't considered a luxury any longer; it's a necessary integration as these power capsules become exceedingly powerful despite being housed in smaller casings.
According to KULR, that reality, perhaps proactive to regulatory changes, 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. All tolled, KULR is perfectly positioned to capitalize on revenue-generating opportunities from over 300 enterprise and government organizations. And turning that opportunity into dollars is already happening, with KULR highlighting those new market opportunities and cashing in on its expanded revenue-generating strategies.
That news bodes well for Q3, Q4, and all of 2023. And it should help support the case that KULR will likely beat its bullish forecast. Considering that KULR will face fewer macro-economic pressures in its sector than others, that's more probable than not. Moreover, KULR is in a lithium-Ion battery space where demand far outstrips supply, which translates to having its technology in the right markets at the right time.
Contracts With The World's Largest Companies
Of course, those following KULR know that's no secret. But position is only a part of the bullish proposition. KULR is in play to potentially benefit from a massive spending bill earmarked toward accelerating green energy initiatives. While there is debate about where the bulk of those monies will go, the bottom line is that some of those hundreds of billions will make their way into initiatives led by global business giants, especially those in the defense and aerospace sectors.
In fact, it could further enhance demand from global multi-sector giant Lockheed-Martin (NYSE: LMT), which KULR announced added to its contracted needs for its space-developed phase change material (PCM) heat sink technology.
Lockheed Martin is just one global business giant doing business with KULR. NASA, Andretti Enterprises, Leidos (NYSE: LDOS), and others are also taking advantage of KULR's highest standard of battery safety technology. That's still just a handful of clients. Others are combining to put up to billions of dollars in the revenue-generating crosshairs. Even the U.S. Coast Guard has entered KULR's revenue-generating game plan, with its technology the likely leader to maximize its battery safety product opportunities in the multi-billion dollar maritime safety market.
That's not all. As a valuable and early contributor to the emerging circular electrification economy, KULR is leveraging its technology to fuel potentially exponential near and long-term growth. Evidence of that happening sooner than later isn't hard to find. Investors only need to know where to look and what to include.
Partnerships Are Adding Value
Keeping track of KULR's partnerships also matters when modeling for a more appropriate share price. A potentially massive value-added deal going under the radar is one of KULR's recycling partners securing a shipping certification from United Parcel Service (NYSE: UPS), allowing for the shipment of batteries utilizing KULR's Safe Case products through their vast shipping network. But that's just one part of that certification value.
The certification 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.
Remember that lithium-Ion battery use is still in its early innings of a more massive global trend of adoption. Things taken for granted in the U.S and Europe are still luxuries to other countries. Moreover, those with lesser infrastructures will likely need to implement more formidable safety requirements, especially when these powerful energy sources are utilized to power greater scale.
In other words, while phones and power tools can account for potentially billions of batteries already in the markets, billions more will be used to power additional products, services, and resources. From a potential revenue perspective, that's excellent news for KULR and its investors.
Broadening Its Market Reach
But that's not all supporting the bullish KULR case. Revenues are expected to get a further near-term boost from completing the licensing and starting the construction of its Fractional Thermal Runaway Calorimetry (FTRC). In fact, KULR has said it signed multiple customer engagements with at least three purchase orders expected to close in September 2022. Factoring in those new revenues, which could hit the books as early as the start of Q3, the expectation that analysts will need to revise revenue forecasts higher, often pushing price targets higher, could add to the bullish momentum. There are reasons for that to happen.
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 could be earned during the coming quarters. Additionally, while still an unnamed client, KULR suggested that the near-term potential of its biosensing solution for its Fortune 50 Metaverse customer could be substantial, saying that its recently revised engineering design improves pliability, increases conductivity, and enhances softness to the skin for its client's product. The next shipment from that deal is expected in days, putting another potential milestone announcement in the queue.
KULR's partnership with E-One Moli Energy Corporation is another value driver staying under the radar. The partnership is advancing KULR's total battery safety and thermal management solutions strategy, and details on that are likely forthcoming.
And so is an update from a deal with NASA evaluating a fully automated battery testing program assessing the initial processing capability of roughly 500,000 18650/21700 lithium-ion cells annually. That system is expected to be installed by the end of Q3, with full capability processing beginning in Q4 to support NASA's manned flight specification EP-WI-037.
The sum of those opportunities alone can transform KULR on an operational and revenue basis as early as next year.
A more appropriate Sum Of Its Parts Valuation
But, it's not fair to value KULR on just some of its potential. KULR is a sum of its parts play that can support a significantly higher share price based on real-time market analysis. Better described as holding large-cap technology in a microcap body, KULR exemplifies how slow and steady can win the race. Not many, if any, roughly $1.50 stocks can boast of similar IP, market position, or of having a Who's Who client list that can change the revenue trajectory of KULR in a single transaction.
Nor can KULR peers show a similar ability to potentially dominate a multi-billion, one-day trillion-dollar market by developing a universal modular battery product combining its PPR technology and CellCheck to capitalize on extraordinary revenue-generating opportunities from the E-mobility, enterprise energy storage, data center, and crypto-mining applications markets. Moreover, KULR's IP portfolio could make the competitive landscape nearly impenetrable.
Combined, the sum of KULR's parts makes investment consideration compelling and timely. Moreover, it shows a company built for success after successfully creating a platform needed in a global green-energy economy. Remember, powering that clean energy mission is just one consideration. Safety is equally important, and investors can bet that the former won't move forward without the latter.
Regulation, especially safety-related, as a part of sector growth, is vital to ensuring the industry's viability. And with trillions in play over the long-term, don't expect the sector's most prominent players to keep battery safety integration on the back burner. For KULR, that's a consideration that could be near-term transformative.
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