NYSE:KULR
READ THE FULL KULR RESEARCH REPORT
KULR Technology (NYSE:KULR) is an expert in leading-edge lithium battery technology. It provides engineering design and testing services to major defense, EV, space, and commercial users of these batteries. It sells both off-the-shelf and custom batteries as well as innovative battery transportation containers approved by the United States Department of Transportation and United Parcel Services. It serves the high-end market with battery prices ranging from $300 to $1 million.
It has three specific major growth drivers:
o KULR ONE Space provides custom batteries for use in space and is the only commercial company with NASA JSC-20793 certification for human spaceflight applications which is needed to participate in the Artemis programs. Soon they will add off-the-shelf batteries that are JSC-20793 compliant at a much lower price point and can also compete with standard space batteries for unmanned flights. The company has landed its first Artemis customer and is talking to several others.
o A KULR ONE Guardian contract with the US ARMY for auxiliary silicon anode lithium-ion batteries for aviation use. The company just sent prototypes this month and if accepted KULR expects product orders later this year. These batteries will be retrofitted to current fleets and the product could eventually be sold to other military branches and be used on all their vehicles, aircraft, and some portable equipment.
o KULR VIBE technology is being applied to fans. This is KULR’s patent-protected zero-vibration balancing technology that was designed for, and being used on, helicopters. Fans provide a huge potential market and diversify potential revenues to commercial customers who should be quicker to adopt the technology. The company can take any fan and balance it to result in zero vibration. Fans with zero vibration consume less power usage, can run at higher speeds, last longer life, and produce less noise. The company believes this is a billion-unit market opportunity and can be used in many products including laptops, servers, air conditioners, refrigerators, and cars. It is initially targeting the server fan market where low power usage and higher cooling effect are high priorities due to the high-power usage of AI applications.
It has a robust pipeline of space, defense, and automotive customers working on their next generation of devices. Its engineering services revenues derived from designing and testing new custom products should translate into higher revenue-generating product sales.
The company just consolidated most of its operations into a brand-new facility in Texas, close to NASA and many of its other customers. This space, with enhanced testing, better demonstration capabilities, and production facilities should enable the company to be even more successful in winning new business.
KULR grew revenues by 146% in 2023, but growth stalled in 2024 as its largest 2023 customer, who contributed 51% of revenues that year, has delayed new orders. Therefore, the company has had to more than double revenues from other customers just to reach flat sales. In 2025, we expect rapid growth to resume. Taking out revenues from this customer in 2023, revenues grew 154% in the first half of 2024. We expect the company to resume revenue growth in Q4 2024 and possibly double revenues in 2025.
Based on the valuation of comparable companies, we believe it deserves an EV to Sales multiple of approximately 7.9 times sales resulting in a $0.62 stock price. At 2025 estimated sales of $15 million, it currently trades at an EV to 2025 estimated sales ratio of 3.6 times.
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