QS - Solid Power: Time To Start Accumulating
2024-01-31 00:57:24 ET
Summary
- Solid Power is making promising progress toward automotive qualification. It has 3 marquee EV OEM partnerships with BMW, Ford and SK Innovation and is on-track to sign on more.
- The company is well-positioned to scale electrolyte production and commercialization, as it has invested proactively in capacity to meet expected demand and improved sourcing stability.
- There are signs of strong operational execution, as the company has been able to save costs on both opex and capex.
- The management team and board of directors have many years of domain-specific experience, which positions the company well during the challenging commercialization scale up process.
- Valuations are attractive as the MCAP is at a 56% discount to the total liquidity in the balance sheet, giving at least 2 years of cash burn buffer. Technical analysis also suggests a bottom vs the S&P500, indicating alpha potential ahead.
Thesis
Solid Power ( SLDP ) is a $309 million market cap, TTM $20 million revenue company. Its business is focused on providing solid state battery technologies for the EV industry and producing a sulfide-based solid electrolyte for use in solid state batteries. Solid Power currently earns revenue based mostly on meeting milestone targets in joint R&D development efforts with its key OEM partners (more details below). The company is yet to materially scale up commercialization efforts and have a sustainable mode of operations. It is currently unprofitable (more details below). However, I am bullish on the stock as it seems to be making promising progress toward realizing its potential and capturing the large market opportunity ahead:
I am bullish on Solid Power for 5 key reasons:...
Solid Power: Time To Start Accumulating