KULR Technology (NYSE: KULR) and its stock have been off to the races, literally. Since announcing that Marco Andretti, the third-generation NTT INDYCAR SERIES driver from the legendary Andretti Family, will represent KULR at various events and engagements, including the upcoming Equip Exposition, and by driving the No. 98 KULR Technology Honda for the 2023 Indianapolis 500®, KULR stock has been racing higher. Since Monday, KULR shares have been higher by 24%. But the better news for those considering, there could still be a significant upside, noting that despite the recent bull run, its shares still present a bargain from 52-week highs.
While KULR has certainly not been quiet on news flow, announcing accretive deals and acquisitions in October, this update appears to have captured the eyes of investors. Most already know about its working relationship with the Andretti family and its E Racing Team to develop battery safety technology, but few knew that KULR's stake in the Andretti business extended to having them feature the KULR brand on one of the most watched cars in the biggest race of the season.
A big deal, too, is having Marco Andretti as a KULR Ambassador as they return to Andretti Autosport for the 2023 Indy 500. It's an excellent fit, with KULR pointing out that Marco authentically embodies the spirit of the KULR brand through sincere dedication to his craft and ability to help advance the company's energy management platform.
Deals With Industry-Best People And Companies
The deal is an extension of an alliance formed with the "first family of auto racing" in 2021 when it signed a working partnership agreement with Andretti Technologies, the advanced technology arm of Andretti Autosport. Since then, KULR and the Andretti Team have been combining expertise to improve battery and energy storage performance by intelligently mitigating risk through KULR's suite of advanced technology.
While not much has been speculated about what's happening behind the scenes, apparently, a lot has been happening. Foremost, news shows that KULR and ATEC are building upon a strengthened business foundation and continuing to focus on thermal management and battery safety solutions, including KULR's SafeCase and energy management platform, to embed within the motorsports industry on a larger scale.
And with the Andretti team aligned with KULR in a specialized battery-safety development project, likely, KULR's next-generation lithium-ion battery safety and thermal management products and services can play a role in motorsports racing safety sooner than later. Consumer EV companies like Tesla (NYSE: TSLA) are in play as well. However, much more on the KULR plate is also worthy of investor attention and appreciation.
KULR's commitment to delivering better battery safety solutions across multiple segments is the primary value driver. And it's targeting a massive global energy storage market estimated to become a $554 billion revenue-generating opportunity by 2035. it's also one of the hottest sectors in the market, with KULR technology a potentially integral ingredient to keeping more powerful and denser batter packs safe in both consumer and industrial markets. KULR at the prices presents one of those ground-floor opportunities." But like most good company stocks, those windows don't stay open long.
Appreciation Resulting From Good News
KULR's recent spike, again on news, shows that the opportunity to get shares on the cheap is starting to tighten. That's understandable. Savvy investors are bidding shares higher understanding that KULR's forward-thinking solutions target demand from those needing solutions that maximize efficiency without losing function, or malfunctions, when using Lithium-ion batteries. That's precisely what KULR does. Well, a big part of the company is focused on that objective. Recently, the company has expanded its business reach, now able to capitalize on revenue opportunities inherent to maritime, defense, aerospace, and recycling.
And those revenue-generating opportunities are in the crosshairs and well in reach of earning from innovative technology providing essential thermal management and safety system technologies to just about every sector in business. That includes government agencies, including NASA and the U.S. Department of Defense, two agencies already on the KULR client list. Yes, having a $1.60 stock doing business with some of the world's most powerful and influential companies and agencies is a disconnect. But stock prices are often imperfect. In fact, whether biased high or low, they seldom tell the truth. In KULR's case, its stock price seems to fall short of an appropriate valuation.
But many investors and analysts believe that things about KULR's valuation are about to change. For the better.
The Expanding KULR Portfolio
There are reasons for both to be bullish. KULR has the opportunity to serve massive demand from its highly configurable thermal interface materials. Especially its lightweight heat exchangers and monitoring systems that ensure lithium-ion batteries and the machinery they power can operate efficiently while minimizing the risk of overheating or explosions.
Recently added to the mix are KULR's technologies providing a means for the safe transportation and disposal of these batteries, opening the door to revenue opportunities across the nation from the billions of batteries needed to be disposed of and transported in a compliant way.
Other deals are excellent too. And some extend out of this atmosphere, with KULR's technologies currently used by NASA to transport and store laptop batteries on the International Space Station. More than a shuttle, it's validation that its Thermal Runaway Shield (TRS) is effective in preventing 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.
Other offerings include the previously mentioned Safe Case based on its NASA-proven Thermal Runaway Shield technology. And it's not only used in rockets. The Safe Case has a presence on earth as well, with it being the product to date 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 operations. As billions of lithium-ion batteries await regulatory-compliant disposal, expect analysts to further appraise the revenue-generating potential and model their impact on KULR financials.
Accretive Acquisitions Extend Business Reach
Most recently, KULR acquired VibeTech and announced 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 A.I. 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, many businesses need what KULR sells.
Significant Presence In Private Sector
Government agencies and those in the recycling sector represent a fraction of KULR's interests. KULR's thermal management and battery safety technologies have also captured the attention of private sector companies, inking deals with global business behemoths like Lockheed Martin (NYSE: LMT), 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 evaluations, the next contract with LMT could be a massive one. And it could add to other deals accruing value.
Adding more detail to how KULR works with the Andretti group is warranted. Its partnerships with extreme E.V. racing and associated teams highlight how KULR's solutions assist E.V. manufacturers in pushing the boundaries of performance. One of their agreements is with Andretti Technologies to offer thermal management and battery safety solutions to the Andretti United Extreme E electric SUV racing team. KULR also supplies its carbon fiber thermal interface (FTI) material to Drako Motors for use in the Drako GTE. Boasting a unique quad-motor and 1,200 horsepower, the Drako GTE is one of the world's fastest all-electric supercars, partially made possible through the superior thermal conductivity and flexible mechanical properties of KULR's FTI material.
Another private-sector contract that could drive near-term value is KULR's deal with Volta Energy Products, a subsidiary of Viridi Parente Inc. The agreement calls 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. If the maximum number of units are shipped, KULR could reasonably expect revenues of $40 million within the following year. But if pricing power holds, this figure could rise to $80 million.
A More Appropriate Share Price Deserved
KULR may have already formed relationships with some of the energy storage industry's most prominent clients. However, the company is still pushing forward to expand its existing deals and bring new ones to the table. With such a strong portfolio, analysts are beginning to point out that KULR's current share price may catch up to its inherent value sooner than later.
Though weak markets may be a factor in pulling KULR stock lower, from a fundamentals perspective, the company is strong, leaving analysts optimistic about its prospects over the next year. A rebound in the Russell Microcap index could also place a tailwind to share price appreciation. It's also likely to see KULR stock bounce when the industry and investors get a closer look at KULR technology at the 2022 Equip Exposition, where it will feature its Safe Case and other battery safety technologies as part of its expansion strategy. Having Indy car driver and KULR working partner Marco Andretti at the booth on October 20th, showcasing the group's Indy 500® car, and hosting a raffle for signed memorabilia and tickets to the 2023 Indianapolis 500 should attract a crowd. It should also bring attention to KULR's innovative technologies. It should.
Powering technologies used in supercars to space stations, KULR is undeniably operating within lucrative sectors with high barriers to entry. Notably, the energy storage and thermal management markets will only become more critical to implement as global green-energy initiatives and regulations bring these products further into the mainstream. Thus, Litchfield Hills Research analyst's target of $7 by 2023 may prove conservative.
Tailwind In Q4, Momentum Into 2023
Remember, those price targets were made before several new deals were announced. Since then, 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, an opportunity in KULR's crosshairs.
Adding even more diversification, KULR announced its developments within the Metaverse sector, where the company is collaborating with a Fortune 50 client, speculation it could be Meta (NASDAQ: META), 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, and KULR's early support of a related product could bring substantial interest following a full announcement.
The bottom line: KULR's portfolio of innovative thermal management and battery safety technologies has provided a solid base for the company to focus on and capitalize on rapid expansion opportunities. And for those wanting validation, KULR clients like NASA, Lockheed Martin, Leidos (NASDAQ: LDOS), and Volta Energy provide it. They use KULR technology to protect million to multi-billion dollar assets. Thus, to only say that KULR has established an impressive name for itself is an understatement. Stated more correctly, the reference should include that KULR's technology, products, and services are critical to some of the most important industries, sectors, and global green-energy initiatives.
With everything in play, it's fair to conclude that at least one assumption is well supported by fact; the path of least resistance for KULR stock is higher.
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