New Company Amprius(AMPX)

Investment Analysis Clubs Saul’s Investing Discussions
1

Investing in Amprius Technologies (AMPX): A High-Growth Battery Manufacturer

Amprius Technologies (AMPX) is making significant strides in the battery manufacturing industry with its high-energy density batteries. AMPX was first mentioned on this board by WPR101 in January 2024. They have recent downward price pressure caused by the Shelf registration.

Product Overview

Current Products :

Market and Growth Potential

Total Addressable Market (TAM) :

  • Conformal Wearable Batteries : $1.25 billion.
  • Aviation Batteries : $33 billion.
  • Electric Vehicle (EV) Batteries : $509 billion.

Production and Expansion

Current Production :

  • Fremont Plant :

    • As of March 2023: 250 kWh capacity.
    • Projected: 2 MWh capacity by the end of 2024.

Future Expansion :

  • New Plant in Colorado :

    • Initial production: 500 MWh.
    • Planned scale-up to 5 GWh.
    • Expected to become operational in 2025.
    • Partially funded by a $50 million grant from the Department of Energy.

  • Additional production capacity coming online through toll manufacturers.

Financial Overview

Dilution :

  • Filed a shelf registration on form S-3 in October 2023 for $100 million.

  • Share counts:

    • March 2024: 92.3 million shares.
    • December 2023: 88.9 million shares.
    • December 2022: 84.6 million shares.

  • Dilution: Approximately 4.8% in 2023 and 3.6% in 2024 so far.

Revenue and Costs :

Quarter Total Revenue ($M) Cost of Goods Sold ($M)
Q1 2023 0.7 4.2
Q2 2023 1.6 4.7
Q3 2023 2.8 7.0
Q4 2023 3.9 7.8
Q1 2024 2.3 6.8

Financial Projections :

  • Using the most recent YoY rise of total Revenue and COGS, Total Revenue is projected to overtake COGS in 1 year and 5 months, assuming optimistic growth rates.
  • If COGS increases by 60%, Total Revenues would need to grow at 110% to outpace COGS in 4 years.

Price/Sales Ratio :

  • Current price: $1.37 per share.
  • Using Q1’s sales for the year: Price/Sales ratio is approximately 13.7.
  • With a 5% share growth and estimated sales of $13.3 million: Price/Sales ratio is 9.95.

Investment Considerations

  • Growth Story : Amprius is rapidly ramping up production capacity, particularly with the planned expansion in Fremont and the new plant in Colorado. Additionally, the utilization of toll manufacturers will help meet the high demand for their products.
  • Dilution : The shelf registration and increasing share count present some dilution risk.
  • Revenue vs. Costs : Close attention should be paid to the gap between total revenues and COGS, as well as overall expenses.

Growth Revenue Estimates

  • Assumptions:

    • Q1 2023 was all SiMaxx production at a revenue of .7M with 250KWh
    • SiCore sells for 10-75% of SiMaxx
    • They have a 100MWh production capacity through toll which is all SiCore
    • 25MWh is how much a quarter would produce at max capacity
    • Assume capacity is at 10-50% for this quarter

  • Math : $700,000 / (62.5KWh) = 11,200 KWH

    • Worst Case: Only 25% capacity and SiCore sells at 25% of SiMaxx

      • 25MWh * 10% * (11,200)*10% = 2.8M

    • Best Case: 50% capacity and SiCore sells at 75% of SiMax

      • 25MWh * 50% * (11,200)*75% = 105M

  • Reality Check : $11,200 per kWh is a very expensive battery when Tesla is selling batteries around 140 dollars per kWh for cars or 788 dollars per kWH for Powerwall-2. But high-performance parts can charge a premium, with a power to weight ratio of 4 times Tesla’s batteries and 3-4 times faster charging and discharging speeds than Tesla’s batteries it would make sense for it to be more expensive.

  • Conclusion : Worst case at 2.8M in SiCore would be a growth of 1.5M from Q1. Which would put their Q2 at 3.8M with no growth in their SiMaxx. Which would put them at a YoY growth of 137.5%.

Conclusion

Amprius Technologies represents a high-growth, risky investment opportunity. With a strong product lineup, significant market potential, and aggressive expansion plans, the company is poised for substantial growth. They are in the starting stages of explosive growth potential with the risks associated with it.

Long 1% AMPX

For more detailed information, you can refer to the following sources:

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Hi @drew1618t ,

There’s actually been a couple threads on this company, one which I introduced back in January.

And then a discussion from Saul about the gross margins and unprofitability of this company,

What I can tell you I was initially very interested in this company due to it’s customer list, especially AeroVironment (AVAV) and Airbus which funded this company. I believe Airbus owns over 50%.

Unfortunately this company signed it’s own death warrant recently. When they said existing warrants priced at $11.50 could now be exchanged for $1.10 or over a 90% loss.

This company has burned through capital faster than I expected and they’ve done nothing at all to support their share price. In the short time I have followed the company it’s gone from $4.20 to $1.40 a share.

I actually wrote to investor relations to ask if the company was going to do anything to support it share price after it consistently dropped from $4 to $2 on no news. They replied they cannot discuss share price but thanked me for supporting the company.

Honestly, I’ve never seen a company trade down like this nearly every day.

Could it be a bargain at the currently levels? Possibly if they recover, but this company is definitely not a Saul stock.

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Hi @wpr101,

Thanks for the feedback.

I saw the 100MWh Toll Manufacturers utilizing their older techniques manufacturing SiCore would not have the astronomical price as the SiMaxx which has to grow nano wires.

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