KULR technology(NYSEMKT: KULR)a provider of energy storage solutions, saw its shares rise approximately 1,610% in the past two months. It had been languishing as a penny stock since early 2023, but it abruptly skyrocketed and transformed into a hypergrowth stock after it secured new contracts, returned to NYSE American listing standards and posted a big gain. Bitcoin purchase to launch its own Bitcoin treasury.
But after that breathtaking rally, should you buy, sell or hold KULR stock? Let’s take a look at the business model, growth rates, valuations and potential catalysts to make a decision.
Image source: Getty Images.
KULR develops energy storage solutions for the aerospace and defense industries. The integrated products dissipate heat from lithium-ion batteries with thermal interface materials, lightweight heat exchangers and other protections against runaway heating.
The solutions can be customized for a wide range of power and electronic configurations, making them ideal for small spaces with limited size and weight.
Founded in 2013, KULR initially developed fiber-based thermal management technologies for NASA and other space applications. These heat-dissipating technologies became the foundation of its current business, and it went public in 2018 as an over-the-counter (OTC) stock before listing on the New York Stock Exchange in 2021.
KULR’s revenue increased 285% to $2.4 million in 2021, 66% to $4 million in 2022 and 146% to $9.8 million in 2023. That expansion was driven by its growing list of partners and customers, including SpaceX, Tesla, Metaplatforms, BoeingAnd General engines.
In the past three months, KULR has expanded its existing battery contract for the U.S. military, signed a new high-temperature battery testing contract with the U.S. Navy, won a defense contract for a major missile program and announced a plan to launch its KULR ONE Space . (K1S) battery to a satellite via SpaceX’s rideshare program in 2026.
Analysts expect KULR’s revenue to grow just 4% to $10.2 million in 2024, but they expect that figure to grow at a two-year compound annual growth rate (CAGR) of 123% to $50.8 million in 2026, because the company recognizes more revenue from its contracts. . They also expect it to narrow its net losses and squeeze out a net profit of $2.9 million in 2026.
As KULR expands its operations, it plans to spend 90% of its excess cash on Bitcoin purchases to build a Bitcoin treasury. It recently made its first purchase of 217.18 Bitcoins for $21 million at an average price of $96,556.53.
That strategy looks similar MicroStrategy‘s Bitcoin buying frenzy over the past four years, but MicroStrategy owns much more Bitcoin ($11.9 billion) as of November 10, with a much lower average purchase price of $42,692.
The bulls argue that KULR has carved out a defensible niche and can continue to scale its energy solutions business as it accumulates more Bitcoin. The bears will point out that KULR, with an enterprise value of $1.15 billion, is overvalued: 115 times this year’s revenue and 23 times projected 2026 revenue.
They will also point out that KULR has grown its share count by 164% in the last five years, while its insiders have sold more than 50% as many shares in the last twelve months. They also didn’t buy a single share in the past three months.
For the time being, KULR seems more like a meme stock than a sustainable growth stock. It’s generating quite a bit of buzz with its thermal technology, expanding customer base and Bitcoin purchases, but it simply doesn’t generate enough revenue to support its sky-high valuations. Therefore, it is smarter to sell KULR stock than to buy or hold a new position in anticipation of bigger profits.
Consider the following before purchasing shares in KULR Technology Group:
The Motley Fool Stock Advisor The analyst team has just identified what they think is the 10 best stocks for investors to buy now… and KULR Technology Group wasn’t one of them. The ten stocks that survived the cut could deliver monster returns in the coming years.
Think about when Nvidia created this list on April 15, 2005… if you had $1,000 invested at the time of our recommendation, you would have $839,670!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including portfolio building guidance, regular analyst updates and two new stock picks per month. TheStock Advisoris on duty more than quadrupled the return of the S&P 500 since 2002*.
View the 10 stocks »
*Stock Advisor returns December 23, 2024
Randi Zuckerberg, former director of market development and spokeswoman for Facebook and sister of Mark Zuckerberg, CEO of Meta Platforms, is a member of The Motley Fool’s board of directors. Leo Sun has positions in Meta Platforms. The Motley Fool holds positions in and recommends Bitcoin, Meta Platforms, and Tesla. The Motley Fool recommends General Motors and recommends the following options: In January 2025, $25 would appeal to General Motors. The Motley Fool has a disclosure policy.
KULR Technology Stocks: Buy, Sell or Hold? was originally published by The Motley Fool
