July 31, 2008 – UltraLife Batteries (Nasdaq:ULBI) announced Q2 earnings this morning, with net income of $6.3 million, up from $2.4 million in Q1 (or 161%), and from $1.2 million (or 425%) for the same period last year. Revenue was $87.8 million, up from $49.5 million (or 77%) last quarter and from $45.1 million (or 94%) for the same period last year. Everything about UtraLife’s report are showing acceleration. One of the areas of the report we liked the most is that its net margins increased from 5% to 7%.
We are raising our revenue estimates for the company for the FY 2008 to $270 million, based on its guidance this morning, and therefore are raising our price targets for the stock to $18-$19 range, based on a 1.25x P/S multiple on our 2008 revenue target and a 25x P/E multiple on our 2008 earnings target of $13.2 million.
The company reiterated this morning that it has a solid backlog in the second half and a strong pipeline and it is expanding its sales reach into new markets in the areas of smart batteries and charges, communications and fuel cell systems. We have reported previously that the company’s business is diverse and well balanced and continue to think this stock has tremendous upside.
Disclosure Note: SCPEditor has no position in ULBI.