Is Blink a Contender in the EV Space?

The EV sector is at the start of its growth stage. Like any new-age sector, this industry has also experienced some corrections in recent times.

There are several stocks which are available at cheaper valuations and seem attractive to investors. Blink Charging (BLNK) is one such stock. Blink has made its name in the EV charging space and is in an excellent position to bolster its rate of growth with the growing demand for EVs around the globe. 

The company has lost about 18% year-to-date. Yet, the market feels it can be a good investment option, especially now after the conflict between Russia and Ukraine.

This is because the warlike situation has imposed many sanctions on Russia prohibiting the import of resources like oil, natural gas, and coal from the country. The market feels this move against Russia can potentially impact the global energy sector in an adverse way, thus increasing the demand for alternative energy sources, as well as EVs largely in the coming times. 

Blink Charging is a Florida-based company that operates and provides residential and commercial EV charging equipment to enable EV drivers to recharge at various location types.

It also runs Blink Network, a cloud-based system used to operate, maintain, and track various Blink charging stations. Presently, it operates 30,000 charging ports across 13 countries, allowing its users to conveniently charge at any of its locations worldwide.

Blink Charging has already received grants of $26.5 million from various governmental agencies and will be deploying products over the next several years.

Further, the company might also enjoy a significant upside from the $7.5 billion that has been allocated exclusively to EVs last year by the United States government in its infrastructure bill. We’re bullish.

Growing Revenues

Blink came out with its fourth-quarter financials for the year 2021 in March and received mixed responses. The market was quite disappointed upon witnessing the wider than expected losses, but a positive factor was that the revenues were much higher than expected.

The company’s revenue for the quarter was recorded at $7.95 million, thus translating to a loss per share of $0.45. The revenue for the quarter showed a massive 224% growth year-over-year, while the amount of loss for the period was more than double compared to that of last year. 

Revenue growth was driven by the addition of new products in the U.S. market, and the expansion of sales in the newer European market.

However, due to investments in newer technology, new product developments, and then the global expansion executions, the overall cost of operations went up significantly.

This led to higher-than-expected losses. Further, adjusted EBITDA was a loss of $9.1 million, with a gross margin of around 11% compared to the EBITDA loss of $7.1 million that was generated in the last year.

Blink did not provide any guidance for 2022. However, it has warned against expecting a two-fold rise in revenue. As per analysts from Needham, the company might turn profitable by 2024 and beyond 2025 can generate revenue CAGR of 16% through 2030.

The Tipranks’ Stock Investors Tool indicates two out of three analysts have given Blink Charging a Buy rating, with the other assigning a Hold. The average Blink price target of $36.33 suggests 29.2% upside potential.

Electric Rage

The EV charging market is expected to grow at a CAGR of 24% through 2030, reaching a market size of almost $40 billion per year. Blink is going all out to make the most of this. The company has the early mover advantage and can also benefit extensively from things like its vertically integrated value chain. 

Moreover, it has also been entering into excellent partnerships with giants in the EV space. In the last quarter it partnered with Bridgestone, a supplier of automotive parts, under which the company will implement its IQ 200 EV chargers at 25 Bridgestone service centers to address the growing requirements of EV drivers.

Further, Blink has also partnered with General Motors to provide new IQ 200 Level 2 chargers for the company’s newest EVs across the U.S. and Canada.

Another important strategic master development and production agreement was entered with SGB Development Corp, a construction engineering firm, for bringing solar, off-grid, and Modular EV Charging solutions to the market.

Like most other EV stocks, Blink Charging has strong growth potential. The company has been generating increasing commitments from both the business community, as well as federal entities.

However, till it reaches its desired level the stock is expected to remain volatile.

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