Shares of Ceres Power Holdings plc (LON: CWR) today surged 13.8% despite the British electric battery company not making any major announcements.
The last major development from the company was the signing of a strategic collaboration agreement with AVL, a powertrain engineering consultancy.
The deal was meant to accelerate customer adoption and product development of solid oxide fuel cell (SOFC) technology for numerous transportation, stationary and other applications.
Ceres Power continues to benefit from positive investor sentiment given the shift towards electric power vehicles and other devices and technologies that use electric batteries designed based on the company’s intellectual property.
The firm enjoys high profit margins of up to 73% according to its latest earnings report given that it licenses most of its technology to other companies and does not manufacture the batteries, which use its technologies.
The latest partnership will allow Ceres Power to continue licensing its technologies independently to other companies, a brilliant move for the company to retain and grow its current income stream.
The two companies will jointly license the technologies developed via the partnership creating new income streams for both firms.
Ceres Power is currently trading at a price-to-sales ratio of 128x, which might be a tad expensive for some investors.
Traders interested in short-term positions should wait for a pullback before establishing new positions.*
*This is not investment advice.
Ceres Power share price
Ceres Power shares surged 13.8% today to trade at 1446p having rallied from Thursday’s closing price of 1270p.
