Advanced Batteries Will Fuel Global Drone And Mobility Demand

Key Takeaways

• Strong demand for advanced batteries, premium pricing, and key customer wins support robust revenue growth and margin outperformance.
  
• Expansion into global manufacturing and automation reduces volatility, increases scale, and enhances visibility and stability of future earnings.
  
• Heavy market concentration, production scaling risks, supply chain vulnerabilities, increased competition, and potential equity dilution collectively threaten margin stability and long-term earnings growth.

Catalysts

Develops, manufactures, and markets lithium-ion batteries for mobility applications.

• Rapid acceleration in commercial drone and electric mobility adoption-driven by decarbonization initiatives and government policy mandates (including U.S. Executive Orders supporting domestic drone production)-is expected to unlock significant, sustained demand for Amprius' advanced batteries; this should drive robust top-line revenue growth as more customers move from qualification to production volume orders.
  
• The industry's increasing need for lightweight, high-energy-density battery solutions (for drones, electric aviation, and next-gen vehicles) enables Amprius to maintain premium pricing and outperform on gross and net margins due to its demonstrated product performance advantages-evidenced by record energy density and recent customer wins (e.g., AALTO/Airbus and U.S. Army).
  
• Diversification of the customer and geographic revenue base through global contract manufacturing partnerships (notably new capacity in South Korea) is expected to reduce revenue volatility and support scale-up, which should improve operating leverage and expand net earnings over time.
  
• Ongoing investment in automation and manufacturing capacity (supported by government contracts like the $10.5M Defense Innovation Unit award) positions Amprius to capture a larger share of future high-margin opportunities in defense and critical infrastructure, enhancing both revenue visibility and earnings stability.
  
• First-mover advantage, validated technology, and policy tailwinds for domestic and friendly-nation battery sourcing (NDAA-compliant, U.S. DoD engagement) position the company to secure long-term supply agreements, helping transition to recurring, higher-margin revenue streams and improving forward earnings quality.

Amprius Technologies Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Amprius Technologies's revenue will grow by 89.8% annually over the next 3 years.
• Analysts assume that profit margins will increase from -86.4% today to 4.4% in 3 years time.
• Analysts expect earnings to reach $13.4 million (and earnings per share of $0.05) by about August 2028, up from $-38.7 million today.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 190.5x on those 2028 earnings, up from -24.0x today. This future PE is greater than the current PE for the US Electrical industry at 33.0x.
• Analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 8.69%, as per the Simply Wall St company report.

Amprius Technologies Future Earnings Per Share Growth

Risks

• Amprius remains highly concentrated in the aviation and drone markets (over 90% of quarterly revenue), making its revenues vulnerable to fluctuations in demand or procurement cycles from these niche sectors; a slowdown or lost key contract could create significant revenue volatility.
  
• The company faces ongoing risks around scaling its proprietary silicon anode technology from pilot to mass production, as high complexity and evolving manufacturing requirements may lead to persistent high costs, margin pressure, and delays in achieving steady-state profitability.
  
• As Amprius capitalizes heavily on contract manufacturing partnerships (notably in China and South Korea), it is exposed to supply chain disruptions, geopolitical risk, and potential material shortages, which could impact costs, delivery timelines, or product quality, ultimately affecting earnings and margin stability.
  
• Industry-wide battery cost reductions and increased global production capacity may compress pricing power for advanced chemistries, threatening Amprius' ability to sustain premium margins as competitors close the technology gap and battery solutions become more commoditized.
  
• Substantial additional capital expenditures, including government contracts and future U.S. manufacturing expansion, could necessitate further equity dilution-especially in the absence of timely government incentives or tariffs-potentially weighing on shareholder returns and long-term earnings growth.

Valuation

• The analysts have a consensus price target of $13.0 for Amprius Technologies based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $18.0, and the most bearish reporting a price target of just $10.0.
  
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $306.6 million, earnings will come to $13.4 million, and it would be trading on a PE ratio of 190.5x, assuming you use a discount rate of 8.7%.
  
• Given the current share price of $7.44, the analyst price target of $13.0 is 42.8% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.