Summary KULR Technology Group, Inc. reported disappointing first quarter results, with both revenue and profitability missing expectations by a wide margin. The company continued to aggressively sell new shares into the open market in order to expand its Bitcoin holdings. KULR Technology continues to trade at a substantial premium to market leader Strategy. Even when assigning a generous valuation to the company's tiny core business, the company remains overvalued. Recent move into Robotics is not likely to result in meaningful near-term sales. Anywhere you slice it, KULR Technology stock appears substantially overvalued at current share price levels. As a result, I am reiterating my "Sell" rating on the company's common shares. Note: I have covered KULR Technology Group, Inc. (NYSE: KULR ) or “KULR Technology” previously, so investors should view this as an update to my earlier articles on the company. After the close of Thursday's regular session, KULR Technology reported disappointing quarterly results with both revenue and profitability missing expectations by a wide margin: Company Press Releases / Regulatory Filings Gross margin of just 8.4% represented a new all-time low for the company. On the conference call , management attributed the poor performance to " unanticipated labor hours needed to complete technical projects, " but abstained from providing additional details. Cash burn of $10.0 million increased to new all-time highs but aggressive open market sales resulted in liquidity increasing further to $79.7 million (including KULR Technology's Bitcoin holdings). During the quarter, the company raised approximately $50 million in net proceeds from the sale of 19.4 million newly issued shares into the open market and utilized $44.5 million for the acquisition of 449.45 Bitcoin. Subsequent to quarter-end, the company sold an additional 13.9 million shares into the open market for gross proceeds of $19.8 million and acquired 42.37 Bitcoin for approximately $4.0 million. KULR Technology has also entered into a Bitcoin mining services agreement with limited duration, which accounted for approximately 10% of reported revenues: Additionally, on March 7, 2025, the Company entered into a sixty-day lease agreement (...) with a bitcoin mining services company to operate 2,500 S-19 bitcoin mining machines on KULR’s behalf, at a total lease cost of $850,000. Through March, 31, 2025, 2.97 bitcoin have been earned pursuant to the Machine Lease Agreement, at an average value of $84,186 per bitcoin. (...) During the period from April 1, 2025 through May 13, 2025, the Company has earned 4.48 Bitcoin from mining services. As of May 13, 2025, the company holds 7.45 Bitcoin from mining services with a current market value of approximately $777,000. In aggregate, the company now holds 716 Bitcoin with a current market value of almost $75 million. In addition, KULR Technology's estimated pro forma cash balance amounts to approximately $35 million after accounting for assumed quarter-to-date cash burn. Regulatory Filings / Yahoo Finance Based on these numbers, the company's current enterprise value calculates to $275.5 million or 3.7x the value of its Bitcoin holdings as compared to market leader Strategy's ( MSTR ) much more moderate 2.0x multiple. Given the poor start to the year, I do not expect KULR Technology's 2025 sales to " at least double, " as projected by management on the Q4/2024 conference call . In recent quarters, management has started to advertise the company as a one-stop shop investment in several of the biggest hype themes in today's market (Space, AI, Defense, Energy Storage, Nuclear, Bitcoin). Given this pattern, KULR Technology's recent move into Robotics isn't exactly a surprise: KULR Technology Group, Inc. (...) announced the launch of a new strategic partnership with German Bionic (“GB”), a leading global robotics company known for its groundbreaking robotic exoskeleton, Apogee ULTRA, to expand into the rapidly growing fields of robotics and artificial intelligence. GB counts global logistics companies, large retailers, hospitals, and major international airports among its customers, including Dachser Intelligent Logistics, GXO, Nuremberg Airport, Canadian Tire, the British consumer electronics retailer Currys, and the Charité Hospital Berlin. (...) The initiative includes the formation of a dedicated business unit, KULR AI & Robotics, aimed at driving innovation and commercialization of affordable and mature robotic solutions to support the US workforce and reshoring of manufacturing. (...) As disclosed in the company's quarterly report on form 10-Q, KULR Technology also invested $3.3 million to acquire preferred shares of privately-held German Bionic. While the company's Apogee robotic exoskeleton has been on the market for several years already, prices well north of EUR 10,000 per unit make it difficult for businesses to justify the investment. Company Website In addition, German Bionic is operating in a highly competitive market with large domestic and international players offering similar products at lower price points. As a result, the company continues to burn cash and will likely require additional funding going forward. For my part, I do not expect this new strategic partnership to generate substantial revenues for KULR Technology anytime soon, if ever. Given the company's limited scale and less-than-stellar operational execution in the first quarter, it is difficult to justify an enterprise value of almost 30x the company's 2024 sales. Even when considering the company a Bitcoin pure play, an investment doesn't make sense, as shares of market leader Strategy are available at a substantial discount to KULR Technology's valuation. To be perfectly honest, I am struggling to assign meaningful value to the company's operations. But even when assuming 50% year-over-year growth and a 10x revenue multiple, downside in the shares would still be material: Regulatory Filings / Author's Calculations Consequently, I am reiterating my " Sell " rating on KULR Technology's common shares. Risk Factors The most apparent risk to the bear thesis would be another jump in the Bitcoin trading price. In addition, substantial improvements in the company's operating performance would likely attract a new round of speculative investors and traders to the stock. Bottom Line KULR Technology reported disappointing first quarter results. Management did not waste much time on discussing the reasons behind the miss or updating full-year expectations, but spent most of the conference call touting the company's Bitcoin accumulation strategy and recent move into Robotics. But anywhere you slice it, KULR Technology appears substantially overvalued at current share price levels. In addition, persistent open market sales are likely to remain an overhang even when assuming a decent Bitcoin performance. As a result, I am reiterating my " Sell " rating on KULR Technology's common shares.
