KULR Tech Stock: Buy, Sell or Hold?

KULR technology (KULR -2.92%)a provider of energy storage solutions, has seen its stock rally approximately 1,610% over the past two months. It had languished as a penny stock since early 2023, but it abruptly soared and transformed into a hypergrowth stock after securing new business, regaining compliance with NYSE American listing standards and making a big gain. Bitcoin purchase to launch your own Bitcoin treasure.

But should you buy, sell or hold KULR stock after this stunning rally? Let’s look at its business model, growth rates, valuations and potential catalysts to make a decision.

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What does KULR technology do?

KULR develops energy storage solutions for the aerospace and defense industries. Its integrated products dissipate heat from lithium-ion batteries through thermal interface materials, lightweight heat exchangers and other protections against runaway heating.

Its solutions can be customized across a wide range of electrical and electronic configurations, making them ideal for tight spaces with size and weight limitations.

KULR was founded in 2013 and initially developed fiber-based thermal management technologies for NASA and other aerospace applications. These heat dissipation technologies became the foundation of its current business and were released to the public as over-the-counter (OTC) shares in 2018 before being promoted to New York Stock Exchange in 2021.

How fast has KULR grown?

KULR’s revenue grew 285% to $2.4 million in 2021, 66% to $4 million in 2022, and 146% to $9.8 million in 2023. This expansion was driven by its growing list of partners and customers, which includes SpaceX, Tesla, Metaplatforms, BoeingAnd General engines.

Over the past three months, KULR has expanded its U.S. Army battery contract, signed a new high-temperature battery testing contract with the U.S. Navy, won a defense contract for a major missile program, and announced its intends to launch its KULR ONE Space project. (K1S) 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 compound annual growth rate (CAGR ) over two years by 123% to $50.8 million in 2026 as the company recognizes more revenue from its contracts. . They also expect it to reduce its net losses and post a net profit of $2.9 million in 2026.

As KULR grows its business, it plans to spend 90% of its excess cash on Bitcoin purchases to build a Bitcoin treasury. He recently made his first purchase of 217.18 Bitcoins for $21 million at an average price of $96,556.53.

This strategy seems similar to MicroStrategyIt is Bitcoin buying frenzy over the past four years, but MicroStrategy holds significantly more Bitcoin ($11.9 billion) as of November 10 with a much lower average purchase price of $42,692.

Can KULR justify its stock market valuations?

Bulls say KULR has carved out a defensible niche and can continue to grow its energy solutions business as it accumulates more Bitcoin. The bears will point out to you that with a enterprise value of $1.15 billion, KULR is overvalued at 115 times this year’s sales and 23 times its projected 2026 sales.

They will also point out that KULR has increased its share count by 164% over the last five years, but its insiders have sold over 50% more shares than they have over the last 12 month. They also haven’t bought a single stock in the last three months.

So for now, KULR looks more like a meme stock than a sustainable growth stock. It’s generating quite a buzz with its thermal technology, its expanding customer base, and its Bitcoin purchases, but it simply isn’t generating enough revenue to support its sky-high valuations. Therefore, it is smarter to sell KULR stock than to buy a new position or hold it in anticipation of bigger gains.