KULR Technology Group, Inc. (OTC Other: KULR) stock is racing its way higher- literally. Year-to-date, company shares are roughly 38% higher, and analysts covering the company see considerable room to grow. In fact, in an April report, analysts at Taglich Brothers awarded the company a 12-month price target roughly 87% higher than its current levels. Why so bullish? Because KULR has surging revenues, game-changing thermal management technology, several potentially lucrative 2021 contracts, and a new deal with AndrettiTechnologies that should combine to fuel a breakout year. The great news is that KULR has the experience, technology, and capital to make that happen.
From an investor's perspective, KULR is in the right markets at the right time. And despite its small-cap price of roughly $2.00, KULR is advancing several big-time programs. At its core, KULR is capitalizing on massive industry opportunities through the development and commercialization of high-performance thermal management technologies for batteries, electronics, and other components. That's putting it simply.
For sure, trying to explain the technology to the layman is no easy task. But to those at NASA, the Jet Propulsion Lab, and Andretti United Team E racing, KULR's core thermal conductivity and heat dissipation technology is proving itself a potential lifesaver and an industry game-changer. And since that technology substantially reduces the risk of fire and explosion, that's no understatement.
Better news is that KULR's technology is needed in markets far beyond those clients mentioned. In fact, by mitigating the effects of thermal runaway propagation that lead to fire and explosions, KULR can capitalize on massive market opportunities by providing thermal management solutions for electric vehicles, cloud computing, 5G communication technologies, and energy storage for commercial markets. Also, the technology is attracting considerable attention from aerospace and defense contractors, who recognize and understand its value in military applications such as directed energy weapons and high-power missile programs.
In short, the technology has enormous multi-market potential. And, for investors, the KULR story gets even better. Not only is KULR already commercializing solutions targeting tremendous opportunities in the thermal management and energy storage markets, but its success in doing so is showing up in its revenue streams. Thus, KULR isn't a wait-and-see opportunity.
In fact, year-over-year growth is impressive. And momentum into 2021 is on its side.
Revenues Spike On Partnerships
Undoubtedly, KULR technology can be challenging to explain. But the results from its work are not. And investors have been impressed by what they see.
In fact, despite massive pandemic-related headwinds last year, KULR turned in Q4 revenues that increased by more than 298% compared to the same period in 2019. That surge came as deals made through its aerospace and government business gained traction. The better news is that KULR expects the trend to continue by maximizing recently announced agreements with Andretti Technologies, NASA, Airbus Defense and Space, and the FAA. All can be significant value drivers. Moreover, with more normalized business activity expected later this year in both the public and private sectors, KULR is positioned for exponential growth. Keep in mind that KULR technology is not a luxury in the EV markets; it's being referred to as a necessity.
It's not only analysts that are pointing to its value. The Consumer Product Safety Commission reported that KULR's design solutions could be instrumental in stopping fires and explosions in lithium-ion battery packs. Also positive, a report conducted by the Naval Surface Warfare Center Carderock Division confirmed that KULR's thermal management solutions can prevent cell-to-cell propagation. In other words, in highly specialized conditions and applications, KULR technology is proven to provide safety. Those two confirmations could have a meaningful impact on government and defense contract awards. Better still, when dealing in that sector, the deals can be enormous.
Obviously, those reports open the door to substantial opportunities. Better still, KULR is matching its technological innovations with surging revenues. And investors and analysts are paying attention. In fact, Taglich’s analysis suggests that 2021 revenues could triple toward the $2 million mark. That estimate, by the way, was raised from $1.5 million in prior coverage.
Notably, KULR is certainly doing its part to maximize revenues. In Q4, KULR said it improved comparable period gross margins from 48% to 80%, increased shareholder equity from a deficit of $525,612 at the end of Q3 to a surplus of $6,118,552 by the end of December and completed a direct offering in January for $8 million to fund 2021 growth opportunities.
Better still, a cumulative effect from the operational improvements could help to accelerate growth. Also, a DoD contract that was pushed into 2021, continued organic growth through multiple accretive agreements, and enviable margins could bring the company closer to break-even this year.
Still, while the balance sheet, margins, and revenues each improved substantially, investors usually end with the same line..."show me the money." The good news there is that KULR is doing just that. And it's driving sales from multiple sources.
Multiple Market Opportunities
KULR already has an impressive and growing list of clients. But they are also doing something most of their industry peers can't claim- effectively competing in multiple billion-dollar markets.
Its focus toward the Energy Storage Market, for instance, is a $59 billion revenue opportunity. But it's expected to get even bigger, with Lux Research predicting that the market will become a $554 billion revenue opportunity by 2035. The excellent news is that KULR already targets core opportunities within that segment, designing products to serve mobility applications, electronic devices, and stationary storage. Its presence now can translate into competitive advantages later.
Another substantial market is the $8.8 billion Thermal Management Market. There, KULR is capitalizing on opportunities created by increasing demand for reliable microelectronics and lithium-ion batteries. Consumer demand for products in that sector is surging.
Again, KULR is intending to drive revenues through its passive propagation resistant (PPR) battery design. That technology prevents fire and explosion by providing a single cell thermal runaway from exiting the battery enclosure. The best news is that the technology could earn demand from battery storage and transportation, electrical transportation, 5G mobile and cloud computing infrastructure, and aerospace and defense markets. Keep in mind that as these devices become more robust in design, the need for thermal management increases.
Incidentally, even at 2021 levels, those markets combine to deliver a more than $41 billion revenue opportunity. However, factoring expected growth of between 15%- 21% into the equation, the investment thesis for KULR is supported by the earlier statement- KULR is in the right markets at the right time.
Set Up For A Breakout Year
Know this, too. KULR is positioned to accelerate growth by having the infrastructure, products, and expertise to bring development stage projects to the market. In other words, its maturation is intentional and by design. Also notable is that they have developed a formidable industry presence while also paying attention to its capital structure. The company has only 46.5 million shares in the float and trades with ample liquidity of roughly 355,000 shares exchanging hands per day.
Better yet, with revenues growing, a diversified product portfolio, and a presence in multiple billion-dollar sectors, KULR inherently has numerous shots on revenue-generating goals. Perhaps best of all, KULR's valuation could surge by successfully penetrating just one of its targeted markets. However, that minimalist expectation is shortsighted.
KULR is likely to do much better, and its industry-changing technology is expected to be adopted in aerospace, communications, electric vehicles, and national defense markets. Therefore, it's more likely that KULR will earn its success through a diversified product mix.
Thus, with the electric vehicle, 5G technology, and thermal energy markets surging, a perfect storm of business convergence could fuel a breakout year for KULR Technology Group. And that makes KULR ripe for investor's consideration.
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