KULR Technology: A Hypergrowth Stock Worth Watching?
A Meteoric Rise
KULR Technology, a leading provider of energy storage solutions, has seen its stock soar an astonishing 1,610% over the past two months. This remarkable surge has transformed the company from a penny stock to a hypergrowth stock, leaving investors wondering if they should buy, sell, or hold.
Energy Storage Solutions for Aerospace and Defense
KULR develops innovative energy storage solutions for the aerospace and defense industries. Its integrated products utilize thermal interface materials, lightweight heat exchangers, and other safeguards to dissipate the heat of lithium-ion batteries. This technology enables customization across a wide range of power and electronic configurations, making it ideal for tiny spaces with size and weight limitations.
A Strong Track Record
Founded in 2013, KULR initially developed fiber-based thermal management technologies for NASA and other aerospace applications. The company went public as an over-the-counter (OTC) stock in 2018 and was uplisted to the New York Stock Exchange in 2021. Its revenue has grown significantly, rising 285% to $2.4 million in 2021, 66% to $4 million in 2022, and 146% to $9.8 million in 2023.
Growing List of Partners and Customers
KULR’s expanding list of partners and customers includes SpaceX, Tesla, Meta Platforms, Boeing, and General Motors. The company has recently secured new contracts, including an expanded U.S. Army battery contract, a high-temperature battery-testing contract with the U.S. Navy, and a defense contract for a major missile program.
Bitcoin Treasury Plans
As KULR scales up its business, it plans to allocate 90% of its surplus cash to Bitcoin purchases, building a Bitcoin treasury. The company recently made its first purchase of 217.18 Bitcoins for $21 million, sparking comparisons to MicroStrategy’s Bitcoin buying strategy.
Valuation Concerns
Despite its impressive growth, KULR’s valuation has raised concerns. With an enterprise value of $1.15 billion, the company is trading at 115 times this year’s sales and 23 times its projected sales for 2026. Additionally, insiders have sold more than 50% as many shares as they sold over the past 12 months, without buying a single share in the past three months.
Is KULR a Sustainable Growth Stock?
While KULR has generated significant buzz with its thermal technology, expanding customer base, and Bitcoin purchases, its revenue growth may not be sufficient to support its sky-high valuations. For now, it appears more like a meme stock than a sustainable growth stock. Therefore, it may be wiser to sell KULR’s stock than to buy a new position or hold it in anticipation of bigger gains.
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