Take advantage of the weakness in KULR (NYSE-AMER: KULR) stock. And quickly. When markets rebound, current prices won’t last. In fact, even now, KULR is a stock that should be bucking the trend of small-cap declines, especially after inking an initial $500,000 deal with Lockheed Martin (NYSE: LMT). By the way, while that number may sound small, consider that a company like LMT doesn’t tend to waste its time and resources on projects that don’t further its own ambitions. Thus, this deal likely is a precursor of more to come.
The better news is that it adds to a KULR in hyper-growth mode. In fact, the initial agreement with Lockheed for its passive propagation resistant (“PPR”) battery systems adds to a revenue stream that is already generating record-setting performance. Better still, this newest deal is for immediate delivery, and likely the starting point in the partnership as LMT embraces KULR’s technological advancements in PPR energy products for its Advanced Energy Systems.
Remember, too. This deal is specifically what KULR has been working toward and is in its operational wheelhouse as hardware thermal energy management components get incorporated into its patented carbon fiber architecture. Thus, reading between the lines of what this deal can generate, consider the value more than a milestone; it’s a catalyst.
Video Link: https://www.youtube.com/embed/GSJ3SYn_3wY
Validation Of Its Core Technology
Undoubtedly, LMT helped create a compelling narrative. That is, KULR technology works. And keep in mind, as the industry leader serving DoD and aerospace customers, LMT doesn’t take misguided chances when it comes to its own multi-billion-dollar interests. They certainly wouldn’t risk using inferior technology and components to jeopardize their own critical mission to meet the most demanding service applications in the world. More importantly, investors should consider the bigger picture beyond an immediate revenue driver for KULR. Exposure on a global stage.
That’s not all. As good as the announcement of its deal with LMT is, and it’s a blockbuster in terms of technology validation, it’s only one part of a value proposition that is becoming increasingly compelling. Not only that, for all intents and purposes, KULR is in its best operating position in history to maximize its potential within multiple and diverse markets. To those paying attention, they know KULR already is.
End-of-year profit-taking aside, KULR stock surged to new 52-week highs last month. And that jump was well-deserved. Even better, the long-term trend appears to be decidedly bullish. Thus, a few days of market weakness does little to change the long-term narrative, and instead, it exposes opportunity. And KULR is doing its part to assure investors that it’s doing the right things at the right time to create potentially exponentially increases to shareholder value in the current and coming quarters. Hence, those on the short side of the trade should consider treading lightly.
2021 Sets Up 2022 For Potentially Exponential Growth
Frankly, betting against KULR’s future is unequivocally shortsighted. They are doing too many things generating near-term value to risk unlimited losses compared to the few percentage points, at most, of downside. And if shares move lower, it’s not a result of KULR not performing and delivering on a high level. They are. Moreover, for investors attracted to new market penetration supported by near-term revenue growth, KULR is on point there as well. In fact, the work completed in 2021 positions KULR for exponential growth in 2022.
Keep in mind, too, KULR isn’t easing into 2022; they are charging. Last month, KULR announced a more than 300% surge in comparative Q3 revenues. Better yet, the guidance calls for more of the same. Much more.
KULR said they expect an appreciable commercialization tailwind in each of its core business segments. Not only is an acceleration expected, but KULR forecasts business to strengthen after fortifying its divisions to create and enhance value sooner than even its own prior bullish guidance expected. Notably, KULR brought attention to a ramp in new partnerships and product development initiatives that position Q4 to be its best ever. In short, more record-setting performance.
Still, in addition to another quarter of expected records, investors would be wise to pay attention to what’s in store for 2022. As noted, 2021 made several things clear. Most important, though, is that KULR’s undoubtedly doing business in the right markets at the right time. And by increasing investment to enhance its resources and staying focused on delivering best-in-class technology and real-time solutions for smart battery platforms, battery cell screen testing automation, and fast charging battery architectures, expect new milestones to be reached sooner than later. Moreover, as its interests take advantage of a surge in customer demand, milestones achieved can turn into catalysts.
Revenue-Generating Momentum In Q4 And Into 2022
And catalysts generally become significant value drivers. The most anticipated one is for KULR to become EPS positive, and recent deals could deliver that result in a hurry. In November, KULR inked new partnerships with Clarios and Retriev Technologies that expedite KULR’s go-to-market initiatives.
Those deals add to the special permits KULR earned from the U.S. Department of Transportation (“DoT”) authorizing the transportation of damaged, defective, and recalled (“DDR”) lithium-ion cells, batteries, or lithium metal cells contained in or packed with KULR’s proprietary Thermal Runaway Shield (“TRS”) packaging. While the inherent value of those permits generates revenues, the more significant takeaway is that they are another validation of its core technology. By the way, KULR is one of a tiny handful of companies that earned them.
Of course, the better news is that while those permits result from KULR’s core technology, it’s not their only. This year was a defining moment that proved KULR’s ability to develop multiple markets in an accretive way, and doing so also significantly enhances the value proposition. Not only that, current price levels expose a considerable disconnect from accomplishments made in just the past two quarters. But, as noted, with declines apparently in sympathy with broader market weakness, that valuation disconnect may start to tighten. When it does, it will fit with a KULR growth strategy showing no signs of slowing down.
Instead, KULR is making tremendous progress in penetrating new and potentially massive markets. Moreover, KULR has made no secret that while it had a great year, it’s far from reaching its ultimate goal of providing total battery safety solutions for more efficient battery systems, increased sustainability, and end-of-life battery management. Thus, with KULR a habitual provider of good news, a wise consideration may be to side with their guidance and ambition.
And there’s plenty to suggest its growth curve will steepen.
New Partnerships, Strong Balance Sheet
Notably, that’s already happening. KULR was better positioned than ever to create a new swath of shareholder value at the start of this quarter. They had about $11 million cash on hand, which KULR noted was more than sufficient to grow its business and execute its near-term objectives. Those objectives, by the way, are a work in progress, not a long-term proposition.
KULR blazed a trail of new revenue-generating deals in Q3. In particular, they partnered with Heritage Battery Recycling (“HBR”) to provide safe transportation of HBR’s battery collection operations across North America through its KULR-Tech Safe Case. It’s yet another validation of KULR technology. Even better, with HBR, through its subsidiary interests, maintaining access to over 100,000 customer locations, 2,500 employees, and a fleet of over 1,300 power units and 108 facility locations across North America, it can be an appreciable revenue driver as soon as this quarter.
That’s not all. The agreement embellishes a services partnership with HBR arising from their merger with Retriev Technologies. Incidentally, the deal between HBR and Retriev created the largest lithium-ion battery recycler in North America. While great for them, it’s excellent for KULR as well. In addition to the revenue-generating opportunities from existing e-bike and scooter customer programs related to battery safety, KULR now expects to extend new services to provide safe transportation logistics to Retriev’s battery collection operations throughout North America. Hence, KULR is part of another win-win deal.
There’s more to like. While the deal with Retriev is substantial, so is the one made with Clarios, the largest global producer of lead-acid batteries. It’s expected to help generate a potentially massive revenue stream by targeting opportunities in the U.S. Department of Energy lithium-ion battery life cycle initiative. That program is in place to develop processes to safely manage and reuse lithium-ion batteries and their chemical elements in the United States. With the millions, potentially billions, of lithium-ion batteries in the market, that initiative’s final intention can lead to a potentially exponential increase in new business for KULR.
Here’s better news. The deals mentioned are only the tip of KULR’s revenue-generating agenda. And they are taking advantage of opportunities from a client list often reserved for only large-cap companies. Hence, deals like the one made with LMT can go from impressive to astronomical in a hurry.
Impressive Client List Of Global Leaders
Current global clients beyond LMT include NASA and its Perseverance Mars 2020 Rover, Andretti Enterprises, Leidos (NYSE: LDOS), and Marshall Space Center. And while impressive, those world-class companies are only a small representation of KULR’s global customer list.
Other global names and agencies partner with KULR to utilize its state-of-the-art thermal management technologies. And that choice is not by coincidence. KULR is chosen because they are creating, and more importantly, able to implement, next-generation battery safety solutions that make batteries cooler, more efficient, safer, and lighter for usage. Most importantly, KULR technology has proven to mitigate the risk of fire and explosion in these lithium-ion batteries. And providing those comprehensive safety measures and advantages is helping KULR to stake its claim.
Actually, staking a claim is one thing; KULR protecting client assets is quite another. And it’s the reason why KULR technology attracts attention. Remember, KULR isn’t an early-stage technology development company. They are already in the field. More impressively, being a part of the Perseverance Mars 2020 rover puts them in space. Not many other micro-cap companies can make a similar claim.
Still, while KULR’s ability to impress NASA is an admirable accomplishment, it’s just one of many. Other important validations come from clients in a lithium-ion battery market expected to eclipse $116 billion within ten years, and by 2040, that market is expected to become more than $300 billion. Hence, KULR prints a trifecta ticket by being in the right markets with the right clients at the right time.
Keep in mind, from a market perspective, everything from battery-operated tools to hypersonic missiles can benefit from KULR safety technology or some form of it. But, “some form of it” will be difficult to source with KULR’s IP portfolio protecting the recipe to create and embed the safety measures that KULR delivers. Indeed, being the leader in the sector will have its advantages.
Energizing A Lithium-Ion Battery Sector
Better still, it attracts attention. The good KULR wants. It may have helped KULR earn a deal to develop a battery cell screening and automated testing system for its Department of Defense and Aerospace customers. Those clients want two things: extend strategic battery reserves and implement safety thermal runway technology to reduce the risk of fire and explosion. KULR intends to deliver both.
Also in focus is KULR demonstrating it can take on a massive project from start to finish, with its DoD project being built from the ground up through an open-source flight control system. Like its other deals, it’s also a near-term value driver, with the pilot system being tested expected to be finished in the first half of 2022. The end result has KULR anticipating processing up to 1.2 million 18650 and 21700 cylindrical battery cells per year. Needless to say, positive results from the pilot initiative could have a tremendous impact on future revenues.
Another high-profile project has KULR showing that its carbon-fiber technology can do more than make lithium-ion battery technology safer and faster. After all, they already proved that. Now, KULR plans to take things a step further and demonstrate that its carbon-fiber technology can enable lithium-ion batteries to charge faster and last 20 times longer than before. Updates on both programs could come in early 2022, if not sooner.
And here’s a “what if” deal not getting the attention deserved. While details are scarce, notes within a KULR presentation indicated that the FAA may be evaluating its battery-safety system and technology for in-flight use on aircraft. What would it mean for KULR if the FAA found cause to have aircraft implement battery safety technology? Put simply, a likely transformation from micro to large-cap stock quickly.
Can such a mandate happen? Absolutely. KULR’s technology is not cost-prohibitive and would follow an FAA mandate to ensure the safety of passengers and cargo. Notably, the FAA has required changes that do far less. An update on this potential driver could come during the next conference call. If positive, 52-week highs of $3.80 probably wouldn’t even be a rest stop.
The Value Proposition Is Compelling
Hence, don’t ignore the opportunity. If KULR did nothing in Q4, current valuations considerably undervalue the company’s projects, revenue growth, and IP portfolio. But that isn’t the case. KULR is doing a lot today and is expected to do much more in 2022.
Thus, despite its roughly 110% gains since the start of the year, the bullish thesis is still in its early innings. And with its new NYSE-American listing, strong balance sheet, and top-tier list of clients wanting to do business, KULR stock can be a gift that keeps on giving throughout 2022.
Remember, KULR has a lot to talk about. And with news from KULR setting a precedent of being shareholder-friendly, taking advantage of weakened prices ahead of a series of expected revenue-creating announcements may be timely. Indeed, those following the KULR story know that when the company talks, it’s an excellent time to listen. Better yet, history also shows that investors usually respond in kind to send share prices substantially higher.
Therefore, being on board ahead of updates may be a wise consideration.
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