Solid Power, Inc. (SLDP) stock intrinsic value fair value estimate & owner earnings analysis

What the business is. Solid Power, based in Louisville, Colorado, develops sulfide solid electrolyte, the key material in all-solid-state batteries, along with cell know-how it uses to support that material. It does not sell batteries or electrolyte at commercial scale. Its revenue ($20.1 million in 2024, $21.7 million in 2025) comes from development agreements, engineering milestones, sample electrolyte and a U.S. Department of Energy grant of up to $50 million toward its pilot plant. That revenue is falling: the first half of 2026 brought only $2.8 million, and the second quarter was negative after a $1.2 million reversal when milestone assumptions changed. Its partnerships are real but early. In October 2025 it signed a Joint Evaluation Agreement with Samsung SDI and BMW AG to supply electrolyte for a demonstration vehicle. Its agreements with SK On (Republic of Korea) cover a pilot cell line, a research license and an electrolyte supply agreement that requires SK On to buy at least eight metric tons of electrolyte through 2030. The SK On line installation work is complete, and a new collaboration is being negotiated. A continuous-process pilot line with up to 75 metric tons a year of capacity is due to start up in the fourth quarter of 2026. A 500-metric-ton commercial plant depends on a partner Solid Power has not yet signed. What the business earns. We measure owner earnings as operating cash flow, less working-capital swings, stock-based pay (a real cost) and the capital spending needed to keep the business running. By that measure Solid Power has lost money every year: about $(10.7) million in 2020, $(39.1) million in 2021, $(86.4) million in 2022, $(91.1) million in 2023, $(90.2) million in 2024 and $(79.5) million in 2025. Those figures include interest earned on the company's investment portfolio. Because we count that cash separately below, we strip the interest out. That leaves the cost of running the business at about $100 million in 2024 and $88 million in 2025. The reported profit in 2021 and the small loss in 2022 came mainly from non-cash gains on warrant liabilities, which we removed. Management expects to spend $85 to $100 million in cash in 2026, including the pilot line. The first half of 2026 ran at roughly $105 million a year, though a $7.5 million SK On milestone payment made the reported operating cash flow look better than that. We anchor on the 2024-2025 period because it reflects today's strategy of selling electrolyte rather than building cells. Owner earnings improved by about 12% in 2025. Our base case assumes no further improvement in year one, which is conservative next to that trend and generous next to the first-half 2026 pace. Balance sheet. At June 30, 2026 Solid Power held $419.3 million in cash and investments. Its only borrowing is about $0.2 million of finance leases. The cash comes to roughly $1.71 per diluted share, on about 245 million diluted shares: 228.2 million outstanding, plus restricted stock units and in-the-money options. The 19.3 million warrants with an $11.50 strike expire in December 2026 and are excluded. Shareholders have been diluted about 25% since early 2025. The company sold $91 million of stock at an average of $5.06 in 2025 and completed a $121.3 million registered direct offering in the first half of 2026. Almost all of the company's value is this cash, so the question is how much of it will ever come back to shareholders rather than being spent. Why no commercial earnings are credited. No case includes profits from commercial electrolyte sales, because no contract yet sets commercial volumes or prices. The Samsung SDI/BMW agreement is an evaluation. The SK On minimum of eight tons over five years is small. The 500-ton plant, the Korean joint venture talks and the new SK On collaboration are all unsigned. Management's view that the industry is settling on sulfide solid-state cells is a hope about the market, not a contract. If one of these becomes a binding supply agreement with stated volumes and pricing, the value would need to be rebuilt from those terms. Bear case (about $0.04 per share). Spending runs at about $105 million a year, the first-half 2026 pace and near the top of guidance, with no commercial contract. The cash, still earning interest, runs out in about five years. The present value of that spending is about $410 million against $419 million of cash, leaving about $9 million for shareholders. Further share sales, which the company has used twice in twelve months, would only spread the same outcome across more shares. Base case (about $0.05 per share). Spending stays at 2025's $88 million a year. The pilot line is finished in 2026 and capital spending falls back, while development and grant revenue keeps offsetting part of costs as it has. The Samsung SDI and SK On programs keep running, but none turns into a commercial contract that we can credit. The cash lasts about six years. The present value of the spending is about $407 million against $419 million of cash, leaving about $12 million, or $0.05 per share. Bull case (about $0.07 per share). The company's own levers work well. The pilot line starts on schedule in late 2026, the remaining Department of Energy grant money and SK On's required electrolyte purchases offset costs, and spending falls to about $70 million a year. The cash then lasts about seven years. The present value of the spending is about $401 million against $419 million of cash, leaving about $18 million. In every case the company owes almost nothing to lenders. The value comes down to the fact that the cash is being spent on a program that has not yet produced a commercial contract. If management stopped spending and returned the cash, shareholders would get far more, up to about $1.71 per share less wind-down costs. Nothing in the filings points to that. The company has instead raised more money each time its shares allowed it. What would make this wrong. A binding commercial supply agreement or joint venture, for example for the planned 500-ton plant, with volumes and pricing that cover Solid Power's costs would create value these cases do not include. A decision to cut spending sharply and keep the cash would also raise the value. Until one of these happens, the shares are worth close to nothing beyond the cash management has not yet spent. That is why the margin-of-safety price is only a few cents. We could not work out from the annual filing how much of the $50 million Department of Energy grant is still to be received.