In the 12 years that lithium-battery specialist Ultralife Batteries (NASDAQ:ULBI) has been a public company, its stock has given investors a wild ride -- as this stock chart attests.

Today's news, increasing the stock price by 12.3% in early trading, is that General Motors (NYSE:GM) and an unnamed joint-venture partner have been awarded a multi-year contract worth up to $25 million for lithium batteries to provide backup power for GM's OnStar Telematics systems.

The GM contract looks like small potatoes compared with the five-year contract worth up to $286 million that the U.S. military awarded to Ultralife last Christmas. What a present that was! It allowed the company to realize its expectations of growing its $104 million in trailing annual sales to $200 million in three to five years.

What makes the GM contract special for Ultralife, though, is that it gives the company a name much bigger in the automotive telemetrics market than its current client, Volvo.

Ultralife's other near-term targets are demanding applications. They include 10-year smoke alarms, portable medical devices that must work for extremely long times between recharges, and search-and-rescue beacons and locators that must work in extreme temperatures with very high current output. Winning orders in these commercial markets will help Ultralife build volumes and, over time, lower costs.

In the longer term, there are big markets for thin batteries in smart cards and medical monitors and rechargeable batteries for OEM products that could use a lighter-weight, longer-lasting battery.

The knock on the company has been that it rises and falls on quarterly military contracts -- and that isn't going to change quickly. Besides selling directly to the military, companies such as General Dynamics (NYSE:GD) and Harris (NYSE:HRS) are working with Ultralife to develop battery products for their military products.

Still, the GM order signals that Ultralife is gaining traction that will allow it to meet analyst earnings estimates of $0.44 a share this year and $0.92 next year -- pricing this high technology stock at a reasonable 19 times forward earnings. In my opinion, that's an extremely reasonable price for a company that is expected to grow earnings 17.5% a year over the next five years and could, given a few big contract wins, greatly exceed that growth rate. Also bear in mind that although the price is reasonable given anticipated growth, the timing of earnings growth is closely tied to military activity and spending, which tend to ebb and flow. That might well make for a highly volatile stock in the interim.

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Fool contributor W.D. Crotty does not own shares in any of the companies mentioned but could use a rechargeable battery for a fast-fading wireless optical mouse. Click here to see The Motley Fool's disclosure policy.