KULR Technology Group (NYSE-Amer: KULR) spent its Q2 capitalizing on market opportunities. And according to that report, its revenue-generating momentum is not slowing down. Better still, its year-to-date totals show that revenue growth is accelerating.
In what can be described as another consecutive blowout quarter, KULR posted 212% YoY revenue growth compared to its Q2 2020 comparable. For the six-month comparison, revenues surged by 275%. Investors responded correctly, sending shares higher by more than 11% the following day, reaching an intraday high of $2.27. And while that move higher was impressive, its surge to $2.38 the week prior shows that KULR stock is coiled and ready to move higher on news. For its part, KULR is delivering the fuel to make that happen.
In addition to its triple-digit revenue surge, KULR closed the quarter in the best cash position in its history, with more than $12 million in cash and cash equivalents. Part of that increase came from two successful capital raises, with roughly $10.2 million added from an equity raise and warrant purchases. And while it was mildly dilutive, KULR is now better positioned than ever to extend its string of record-setting growth. In fact, it's already proving that's the case with growth across its broad operational interests.
Of course, turning ambition into revenue is the priority for every growing business. KULR delivers there as well with a business model and platform that has an inherent ability to evolve along with markets. That is evidenced by its quick capitalization on new battery transportation and energy storage products space opportunities. Expect revenue growth and potential commercialization of new products in the current quarter.
Moreover, considering that KULR is on pace to get its total battery safety solutions technology implemented throughout multiple market sectors, its place as a multi-faceted leader in the space is strengthening.
And there's already a lot happening to make KULR stronger in the weeks ahead.
Earning Its Reputation as a Best-In-Class Provider
Foremost, KULR is currently monetizing three US Department of Transportation ("DoT") special permits that allow for the safe transportation of recycled, prototype, and DDR (damaged, defective, and recalled) lithium-ion batteries. The deal can be a substantial long-term asset. Keep in mind these special permits allow for up to 2.1 kWh (kilowatt-hour) of energy capacity, retaining seven times the energy capacity protection compared to its closest competitor.
Thus, its permits go far beyond giving KULR only the ability to safely transport and dispose of lithium-ion batteries. It puts them in a leadership position that can't be easily poached by competitors. Moreover, with millions of lithium-ion batteries in the markets, the demand for its services is expected to surge as consumer, industrial, and even military products integrate lithium-ion power utility. Updates on KULR's ability to maximize these market opportunities are likely imminent. Better still, those numbers should provide a measure to set a more appropriate growth multiple for KULR stock.
Those permits can be a considerable value driver. Still, investors shouldn't look past the revenue-generating power inherent to its smart battery system. That's the core opportunity and leverages a platform that includes hardware and software innovation to monitor the health of battery cells. Sounds complicated, and maybe it is for the layman. From an operational perspective, that's a good thing.
For investors, though, what matters is that KULR is in a leadership position. And with its software and services enabling better control over clients' data intelligence, it can be a value driver of potentially massive proportions. The long-term value proposition for both investor and client is attractive. In fact, KULR provides a completely integrated hardware and software platform to manage battery safety and thermal stability, resulting in a win-win value-based deliverable.
The best news is that its technology can extend from mobile phones to equipment on the International Space Station. Hence, the market potential in terms of integration and resulting revenues is near limitless.
Further, KULR has designed a battery cell screening and testing automation system for its Department of Defense and Aerospace customers to serve their strategic battery reserve initiatives. KULR is already moving that opportunity forward by sourcing critical test and automation equipment to build a proprietary test-pilot system. The test-pilot system, which is expected to be completed in the first half of 2022, will be capable of processing up to 1.2 million cells per year for the 18650 and 21700 cylindrical battery cells.
Another program is focused on developing fast-charging battery energy systems. KULR is looking to maximize the potential from this market by creating a carbon fiber-based architecture for thicker cathode and advanced anode materials to enable faster charging and safer battery cells. Preliminary test results are expected to be published and discussed at its Battery Solutions Day on September 21.
Thus, it's on point to say a lots in the KULR pipeline. The better news is that revenue-generating progress is happening across the board. And in the markets, progress generally translates into dollars earned.
Value Drivers Already Contributing
While there's plenty to look forward to, staying focused on the here and now is equally important. Notably, multiple programs and agreements are already creating shareholder value. Indeed, its revenue surge in Q2 showed its ability to monetize its assets. More importantly, revenue contributions are coming from multiple client sources utilizing KULR's diversified battery-safety technology.
And they are big-name engagements with companies and agencies, including NASA, Andretti Enterprises, Marshall Space Center, and Lockheed Martin. Those agreements and programs are wide-ranging, too. KULR has already told investors that interests with clients can range from having its technology included in everything from consumer EV batteries to hypersonic missiles. That list, by the way, is a small representation of its growing client list that includes several global business giants.
One of those giants could deliver a massive opportunity to tap into the consumer products sector. Although KULR didn't provide a name or specifics just yet, they did note in a recent presentation that it is in discussions with a leading supplier of electronic components in smartphones. Of course, a deal in that market could have an enormous effect on valuations.
And considering that KULR could potentially integrate its technology into more than a billion mobile phones a year, into rows of consumer products, and into almost any product using lithium-ion batteries, current share prices don't scratch the surface of its near and long-term revenue-generating potential. Remember, too, KULR's IP portfolio protects its market space. Having that asset in its quiver could help KULR seize and maintain the lion's share of business in the sector.
That IP could further help accelerate KULR's mission to penetrate the $127 billion drone sector, another market where KULR turned its focus earlier this year. Opportunities there extend from consumer to military application, further strengthening the investment proposition on a valuation basis. Better still, penetrating that market could lead to high-ticket sales, turning its current $212 million market cap into a launching pad for more appropriate valuations.
And monetizing these opportunities are not projects that are years away from developing. It's happening today. Even better, following KULR's guidance, which has always proved credible, business and revenue-generating momentum are expected to continue well into next year. Visibility three quarters ahead is a powerful statement of confidence. Also, keep in mind, additional business momentum will likely accrue as its current client engagements start to mature.
Leveraging Triple-Digit Percentage Growth
Investors did right by bidding shares higher. In addition to its 212% increase in Q2 YoY revenues, they posted a six-month comparative increase of 275%. And, as noted, its cash position of roughly $12 million on June 30, approximately 1482% higher than it was at the same time last year, is its best position in history. The strengthened balance sheet allows them to zero in on near-term milestones that can become catalysts.
Several could already be in play. One could be near an update about its collaboration with Andretti Technologies focused on potentially lucrative battery-safety opportunities in the EV sector. Notably, KULR's expertise combined with the Andretti brand could help penetrate its targeted markets sooner rather than later.
And with massive investment pouring into the EV sector from General Motors (NYSE: GM) and others, which are trying to keep pace with industry pioneer (NASDAQ: TSLA), the opportunities continue to grow. Knowing that battery safety is critical to the sector, KULR is in the right place at the right time. Better still, they are working with an industry powerhouse to expedite program and product development.
These agreements are likely part of the reason that analysts at Taglich Brothers modeled for a $4.50 share price and a tripling of revenues by the end of its fiscal year. So far, except for the share price, KULR is on pace to reach the revenues side of the equation. Typically, the share prices follow. Hence, consolidation could soon be replaced with long-term appreciation.
And rightfully so.
Massive Opportunities Through Global Client Giants
KULR stock already deserves a higher valuation from having a client list that's a "who's who" of global players. NASA, battery manufacturer SAFT, a Total Company (NYSE: TOT), Andretti Technologies, Volta Energy, Leidos (NYSE: LDOS), and Lockheed Martin (NYSE: LMT) are a few that should be attracting investors interest for both the near and long-term opportunities they bring to the company.
Even the FAA is in the discussion, evaluating KULR's battery-safety technology for in-flight applications. The matter in focus is its technology's to substantially mitigate ion-battery malfunctions. In other words, the FAA is evaluating its power to help eliminate fire and explosions.
A resulting approving nod from the FAA to integrate KULR's Thermal Runway Shield (TRS) and passive propagation resistant solutions technology into aircraft would be a game-changer for the company. And it would add to the several massive shots on revenue-generating goals in play.
Big Technology, Low Share Price.
Undoubtedly, KULR's battery-safety technology is much more valuable than the share price suggests. While some argue that market pricing always tells the truth, in this case, it's missing the mark.
A sum of its parts calculation substantiates considerably more blue-sky value be given to KULR. That's after considering its compelling technology that is earning business and recognition from the biggest and best companies in the world of aerospace, EV, consumer products, and military and defense. In the long run, expect the valuation disconnect to tighten. And with several potential catalysts approaching, that's likely to happen sooner than many expect.
Thus, at its current $2.12 price, shares are priced for appreciation. Why? Because KULR is delivering on its intentions. Strong revenue growth, a growing client list, and potential technology inclusion into aircraft and consumer products add fuel to its deserving a more aggressive forward-looking multiple.
Hence, KULR at current levels may be presenting an extraordinary near and long-term investment proposition. Indeed, growth at KULR is accelerating. The better news, however, is that its already fast pace is getting even quicker.
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