Seizing upon short-term growth opportunities in a bull market rally is relatively easy. Overflowing optimism generally lifts all stocks. While that thesis may be true to earn short-term gains, holding onto them during a correction is another story. More successful investors think a better strategy is to find companies acting in the right sector at the right time, especially those positioning themselves for long-term business success. KULR Technology Group, Inc. (OTC Other: KULR) makes that list.
Its performance makes its case for them. KULR is coming off one of the best quarters in its history, markets innovative lifesaving thermal management solutions, and is accelerating growth through a revenue-generating client list that includes several of the world's largest companies. Better still, as it should, KULR stock is reacting well to the business momentum.
KULR stock finished the last half of April strong, adding roughly 27% to its price*. The surge came after several announcements piqued investor's attention. For those already long the stock, they benefited nicely from a rise in demand for shares. The good news is that the rally is expected to continue for the newbies, especially with more investors learning that this small-cap thermal management solutions company is bringing innovative and lifesaving technology to mass markets. Best of all, its thermal management and heat dissipation technology is so good that it's already being used in products at Andretti Technologies, NASA, Airbus (OTC: EADSY), and Jet Propulsion Labs. And there's more. (share price at $2.54 on 4/30/21)
Potentially astronomical contracts could be in the works with national defense contractors currently evaluating its state-of-the-art products and technology for use in directed energy weapons and high-power missile programs. Add that program to its other lucrative market opportunities; massive near and long-term growth could be the result. And the better news is that KULR technology may soon be considered a "must-have" inclusion due to its inherent ability to mitigate fire and explosion in electric vehicles, electronics, and ion batteries.
While those markets are expected to deliver transformative revenues this year, longer-term, its prospects get even brighter.
Video Link: https://www.youtube.com/embed/DbQxY156hGU
Deals With Global Aerospace Leaders
Supporting both near and long-term growth forecasts, analysts at Taglich Brothers published a bullish thesis. In an April report, its analysts modeled for significant share price gains, expecting KULR shares to reach $3.50 this year. If so, it represents a more than 44% increase than its current levels. That's in addition to the 27% gains in the past three weeks. That leads to the question...Why is Taglich so bullish?
The question is not hard to answer. KULR has surging revenues, a tier-one client list, game-changing thermal management technology, and deals with companies like Andretti Technologies that combine to set KULR up for a transformational year. The great news is that new contracts are likely to be immediately accretive. And with the attention its products and technologies are earning, new business is expected to come sooner rather than later.
In fact, by doing business with several billion-dollar clients, KULR's core thermal conductivity and heat dissipation technology could see additional product penetration. In fact, its technology is likely to extend to opportunities well beyond current inclusions on Perseverance Mars, EV racing cars, and proposed military applications. KULR's growth is no surprise, either. The urgency to integrate its technology is happening because it's showing best-in-class solutions to mitigate the risk of fire and explosion. Most importantly, it saves lives.
The bigger part of the story is that lives can be saved beyond EV race events and space missions. While those markets are substantial, KULR is also capitalizing on massive industry opportunities through its development and commercialization of high-performance thermal management technologies for batteries, electronics, and other consumer and industrial-use components.
A move into that market creates enormous opportunities and addresses an issue that most people never consider- battery-operated electronic devices have an inherent risk for fire and explosion. And not only can KULR mitigate that risk, but at the same time can market toward millions of consumer and industrial use products and devices.
Thermal Management Has Multiple Market Applications
The better news is that consumer product applications represent only a single market strategy for KULR. The company is also showing that its technology is needed in markets far beyond the consumer products class.
Its efforts are not going unnoticed. In fact, KULR is doing well to prove that it has the leading technology to mitigate the effects of thermal runaway propagation that lead to fire and explosions. That advantage opens the door to a number of additional markets, including providing thermal management solutions for cloud computing, 5G communication technologies, and energy storage for commercial and industrial markets.
That could be one of the reasons for KULR's impressive growth in 2020. Better still, it finished the year with revenue-generating momentum. In fact, despite facing off against massive pandemic-related headwinds last year, KULR still delivered Q4 revenues that increased by more than 298% compared to the same period in 2019.
Announced deals contributed to the gains. New agreements set the stage for accelerated growth this year.
A Big Deal In The Making
One deal that investors are "reading between the lines" on is between Airbus and Luminor. In an agreement announced on April 26th, Airbus tapped Luminar to test how lidar technology can make flying safer and autonomous. Sounds good for those two. But, it can also be a windfall for KULR.
While Airbus and Luminor could generate billions in contracts for each other, the excellent news for KULR and its shareholders is that its innovative batteries and battery pack solutions appear to be the products of choice in the finished products. If so, analysts likely would revise forecasts to reflect the potential for millions of dollars worth of new business. Better still, a standing in that group could help to expand and maximize recently announced agreements with Andretti Technologies, NASA, Airbus Defense and Space, and the FAA. By the way, a deal with any of the four mentioned could be substantial. An agreement made with all of them, though, could deliver exponential opportunities.
Don't think investors aren't paying attention to the developing story. In fact, Taglich raised its target price from $2.50 to $3.50 this year. They also said that 2021 revenues could triple toward the $2 million mark, another revision to the upside. Notably, KULR has reached some operating efficiency milestones to make good use of its increasing revenues.
In Q4, KULR 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 Q4, and completed a direct offering in January for $8 million to fund 2021 growth opportunities. Those operating efficiencies and a stronger balance sheet will help to accelerate growth.
And with revenue-generating agreements in place, significantly improved margins, and ample cash on hand, KULR appears to be in the best operating position in its history. That strength will likely increase its opportunities.
Seizing Diversified High-Dollar Opportunities
Notably, KULR is capitalizing on massive and diverse opportunities, which makes this company attractive on many levels. Through developing innovative, industry-changing technology, KULR has established an impressive and growing list of clients. However, the markets being targeted should arouse investors' attention as well.
KULR's attention toward the Energy Storage Market, for instance, opens up a more than $59 billion revenue opportunity. While that's big now, Lux Research predicts that the market potential will explode to a $554 billion revenue opportunity by 2035. That 925% increase could be a windfall to KULR. Keep in mind that KULR is already entrenched within that segment by designing products to serve mobility applications, enhancing electronic device safety, and mitigating fire risks for stationary storage. The great news is that KULR's market position now can deliver potentially exponential returns later.
KULR also has the $8.8 billion Thermal Management Market (TMM) in its crosshairs. There, KULR is maximizing opportunities by targeting increased demand for reliable microelectronics and lithium-ion batteries. Consumer and industrial demand for products in that sector are surging. And with technology making products more durable, a by-product of that power is heat. Thus, KULR could find itself in the sweet spot to capitalize on massive TMM opportunities.
Moreover, because its passive propagation resistant (PPR) battery design prevents fire and explosion by providing a single cell thermal runaway from exiting the battery enclosure, its inclusion in millions of products, vehicles, and devices is likely to happen sooner rather than later.
The bottom line is simple. From consumer to industrial to military, its technology is relevant.
Accelerating Growth In 2021
And not only is the company's technology relevant, but it is also changing the trajectory of KULR growth. Better still, that growth is a product of exceptional management, a solid balance sheet, innovative products, and the expertise to transform development stage projects into commercialized revenue-generating assets.
Perhaps the biggest takeaway from an investment perspective, though, is that KULR is far from being a one-trick company. Instead, KULR is capitalizing on diverse market opportunities to monetize multiple shots on revenue-generating goals. Even better, as mentioned earlier, KULR's valuation could surge by successfully inking a deal with only one of its billion-dollar clients. However, a more practical scenario is that KULR will benefit from client agreements throughout multiple business sectors.
In fact, the sum of the parts of each opportunity can be massive. And with the demand for electric vehicles, 5G technology, and thermal energy markets surging, KULR is positioned inside a perfect storm of business opportunity to fuel a period of exponential growth.
If so, the 48% YTD gains could soon become the reference point for a more substantial and deserved share price increase.
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