KULR Technology Group (NYSE-AMER: KULR, $KULR) stock is consolidating. And with the $1.47 level the most referenced accumulation point, investors may be wise to consider the investment opportunity sooner than later. But the interest in KULR is well beyond just the potential for a technical breakout for the stock. The more appropriate interest in KULR should result from what the company is doing, its growing list of industry giant partnerships, and its technology considered vital to the EV and battery-powered revolution.
Recognizing those attributes, and a summing of its parts calculation, shows that KULR offers more than a compelling value proposition; it's also timely. In fact, with the company now having access to at least $55 million in new capital, the valuation disconnect may be too big to ignore. Factoring in several new deals, including follow-on orders from Lockheed Martin (NYSE: LTM), a potentially lucrative long-term presence in the Metaverse sector, a rally in the microcaps, and a recently announced working agreement with battery production giant E-Moli, KULR looks to be better positioned than ever to recapture its 52-week high share price of $3.81, about 159% higher than current prices.
And that's not an overly ambitious target, either. With KULR engaged in revenue-generating contracts with NASA, a potential first-to-market battery safety product meeting new U.S. Coast Guard maritime safety requirements, and three new contracts with Department of Defense (DoD) prime contractors, reaching just the 52-week highs may be a conservative calculation. Frankly, modeling the potential revenue-generating impact from only one of those deals could be enough to score those levels. But with multiple in play, it's the totality of opportunities making KULR an attractive proposition.
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Deals Driving Near And Long-Term Value
One of those opportunities is with E-One Moli (Molicel), with KULR inking an initial order for over 75-megawatt hours of Li-ion battery cell capacity to design and build battery applications meeting the highest safety ratings. That's more to that deal. KULR also expects to purchase over 700MWh of battery energy capacity to accelerate its production and supply chain localization initiatives in North America. It's the long-term proposition that also delivers near-term value.
And that value could accrue faster than many expect. In addition to potentially expanding its working interest with NASA, also a Molicel client, the collaboration ensures that KULR has access to world-class Li-ion battery capacity, an increasingly scarce resource given today's global supply chain challenges. Moreover, KULR gets more than just access; the deal immediately positions them to incorporate its core technologies into battery pack design, testing, and production to create the safest batteries for high-value applications. For KULR, it can be considered an inflection point.
The company noted that the agreement positions its thermal safety solutions platform to become better entrenched in the marketplace, ultimately providing an opportunity to optimize logistics and to more effectively capture untapped value for shareholders. And the Molicel battery cell supply deal does more than putting that intent into play; it also positions KULR to tap into new market opportunities with an estimated revenue potential reaching upwards of $350 million.
That's just one deal in motion. Others are equally impressive.
The Metaverse May Be Virtual, But The Opportunities Are Real
A potentially massive rev-gen opportunity is taking place in the Metaverse, where KULR secured a deal to supply a "multinational technology conglomerate" proprietary carbon-fiber solutions essential in producing groundbreaking nerve sensor technology. Here's the best part. The technology KULR delivers to the development table is more than an accent contribution; it's said to be a vital part of the sensor's ability to allow seamless navigation of digital environments and facilitate a new and preferred approach to using virtual reality to navigate the internet. Thus, while the Metaverse may be virtual, the opportunities are real. And they can be enormous value drivers into the back half of this year.
Remember that this deal again aligns KULR with another global business giant. While the client is unnamed, based on the description in its release, speculation is that it's with a company leading the Metaverse movement, perhaps even Meta ($FB). Regardless, if not Meta, KULR would still be in a relationship with another industry pioneer and be ideally positioned to capitalize on a sector opportunity likely to become a trillion-dollar market opportunity by the end of this decade.
Also, keep in mind that in addition to this deal kick-starting its revenue-generating prowess in the Metaverse, the agreement puts other potentially lucrative collaborations with original equipment manufacturers in the Metaverse industry into play. Moreover, KULR's resume' is immediately strengthened to attract additional clients in the sector. And with no part of the sector "small," it could put multiple billion-dollar market revenue streams in the crosshairs.
While the virtual world is indeed a place to exploit, KULR's deals in the real world are also driving value.
Follow-On Orders With Lockheed Martin
One already in play is with aerospace and defense company giant Lockheed Martin (NYSE: LMT). KULR announced a follow-on contract from a prior agreement utilizing KULR's space-developed phase change material ("PCM") heat sink technology to reduce system temperature excursions and extend the life of critical components within the thermal storage process. Repeat business is an excellent indicator of prior successful performance and, in this case, likely validates and strengthens KULR's relationship with LTM.
Investors should appreciate repeat business. Moreover, recognize KULR's unique valuable solution for compact and high-performance devices that require bursts of computational power in short intervals. It's an ability that keeps competitive threats at a distance. Also, because KULR's PCM heat sink technology is compact, reliable, and lightweight, it's attracting attention from and is utilized by other U.S. aerospace and defense leaders. Of course, repeat business from LTM is a testament to product ingenuity and performance in an area where precision and reliability are critical.
What's more, KULR is showing its inherent ability to engineer, test, and design products with capabilities that meet stringent requirements, including, in this case, those needed in long-range weapon systems. Few, if any, stocks at this price level can boast similar client lists or technological capability. Nor would few likely make it past the security clearances necessary to even participate at KULR's degree. It's an intrinsic asset not reflected in KULR's share price. And it should be.
There's more to like.
Expanding Its Mission With NASA
KULR's ongoing working relationship with NASA is another value driver lacking presence in the share price. Those following KULR know they are already working closely with NASA to develop specialized battery safety technology. That relationship just broadened after KULR announced an agreement to assist in developing battery safety parts in the space agency's Artemis program, the newest U.S.-led international manned spaceflight program. There's better news from an investor's perspective- KULR said it's been processing upwards of 10,000 lithium-ion battery cells weekly. That means new revenues are accruing. And it could lead to more.
In fact, that's likely. Other agencies and private-sector companies are spending billions to advance controlled spaceflight programs. That includes the Department of Defense (DoD), SpaceX ($TSLA), and Blue Horizon ($AMZN), which could lead to significant new opportunities with KULR, a proven contributor to a sector where safety, reputation, reliability, and proof of concept matters. With KULR "continuing" its work with NASA, noting its prior work in the 2020 Perseverance Mars rover, those boxes are checked.
And the successful engagement with NASA could be paying off. KULR announced new contracts with DoD prime contractors to assist in developing state-of-the-art covert weaponry, using its carbon fiber cathode solutions to enable the advancements of projects in high-power magnetic and pulse weaponries. Furthermore, with KULR's products and technology far from an off-the-shelf composition, KULR is in an excellent position from a forward-looking business perspective. A vendor change from KULR would almost certainly lead to millions in extra testing costs, project delays, and potential logistical issues if trying to integrate foreign technology with KULR's proven value-added contributions. Of course, a robust IP portfolio, which KULR has, could also limit that course.
KULR has more value-creating firepower.
Maritime PPR Market In-Play
KULR announced targeting a massive maritime safety market opportunity with its new Passive Propagation Resistant (PPR) KULR-Tech Safe Case solution. This latest KULR technology leverages prior and proven battery-safety technology. But it also brings to KULR massive revenue-generating potential from being the only known battery-safety product meeting new and stricter requirements set by the U.S. Coast Guard for maritime safety.
Most notably, by already meeting product and performance specificity and having the IP to keep competition at bay, KULR could own the market opportunity. Better still, the opportunity to monetize this market is a near-term proposition. And while the market in dollar terms is enormous today, it's expected to get bigger with the USCG expected to expand the criteria to include not just certain commercial vessels but those in the cruise line, shipping, personal watercraft, and fishing industries. Once that happens, the revenue-generating opportunity shifts from enormous to exponential.
Still, like its other projects, most of which are generating revenues, the maritime PPR market is a single, albeit massive, opportunity. The combination of all of the above with legacy deals not noted is what makes the disconnect between share price and intrinsic value an opportunity too good to ignore. Incidentally, not all investors are.
KULR Is Strong Today And Is Getting Stronger
As noted, the consolidation (investment) at current levels is setting up KULR stock for a potentially powerful move higher. And with access to $55 million in cash, with some already working to streamline its operations by relocating specific production capabilities to North America, that climb could start sooner than later. Noting that those initiatives reduce overhead, strengthen operating margins, and lower or even eliminate costs associated with prior logistical supply-chain headwinds, a strong case is made for the path of least resistance is to the upside.
Thus, while bears may have microcap stocks in their grip, especially those included in index funds, like KULR, price weakness may be short-lived. As markets recover, which they are and always do, companies with solid fundamentals will likely be the first to run higher, and KULR checks the boxes to make that list.
Best of all, for those considering the value proposition, KULR is unlike most of its peers. They have multiple deals with a client list that can spend billions on a single project. And with demand for battery safety technology only expected to grow in the coming years, KULR checks off another critical consideration- they are in the right sector with the right products at the right time.
For a growth company already posting record-setting revenues, that's an excellent place to be.
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