Insights

Why Blink Charging Stock Is Bouncing Back After Hitting 52-Week Lows in May

What happened
Blink Charging (NASDAQ: BLNK) was among the several clean energy stocks that announced its first-quarter earnings in May. The dramatic jump in Blink Charging’s first-quarter revenue susprised many, but the electric vehicle (EV) charging stock still ended the month down 16.6%, according to data provided by S&P Global Market Intelligence.
Why should a growth stock growing its revenue at such a stunning pace fall? Blame weak investor sentiment.
So what
Blink Charging designs, manufactures, and operates EV charging stations. You’d expect the company to be busy installing and selling more and more chargers given how rapidly EV sales are rising. And that’s exactly what Blink Charging is doing.
Image source: Getty Images.

In its first quarter, Blink Charging contracted or sold 3,174 charging stations, almost double from the year-ago period. Blink Charging typically enters into long-term contracts with local companies and municipalities that own residential and commercial properties, and installs and operates charging stations for them while retaining a major portion of charging revenue. It also has a Blink-as-a-Service plan, under which property partners install stations and pay Blink Charging a recurring fee to operate them.
Revenue under most of these contracts constitute Blink Charging’s service revenue, which made up less than 20% of its total top line in the first quarter. The bulk of its $9.8 million in Q1 revenue came from sales of commercial, residential, and DC fast chargers. They’re in high demand — product sales shot up 382% year over year in Q1, although a large portion of that growth came from Blue Corner, a European charging operator Blink Charging acquired last year.
Blink Charging has a problem though: Its costs are rising nearly as fast as its revenue, which is why its net loss per share in Q1 doubled year over year to $0.36 per share.
Blink Charging’s operating costs are significantly higher than revenue, and that has investors worried about how much longer they’ll have to wait to see Blink Charging turn profitable despite operating in a high-growth industry.
The sell-off in growth stocks amid rising inflation and interest rates only exacerbated investors’ fears, which is why Blink Charging stock ended May on such a weak note.
Now what
Despite Blink Charging’s big losses and cash burn, investor interest in the stock is unlikely to wane. The EV industry is still in its nascent stage, and most players, from EV manufacturers to component suppliers to charging companies, are unprofitable as they’re still trying to establish a consumer base and grow revenue.
From that standpoint, Blink Charging’s revenue is growing at blistering speed and hit record highs last quarter. The company is also always on the lookout for acquisitions to expand its global footprint. In April, for example, Blink Charging acquired EB Charging, marking its foray into the U.K. In May, it struck a deal worth more than $3.7 million with a parking facility owner to deploy 600 charging points across the U.K. and Ireland.
Investors are perhaps taking note of these points, and see the recent plunge in Blink Charging stock that sent it all the way down to 52-week lows as an opportunity to buy the growth stock this month — the EV charging stock’s up about 12.6% so far in June, as of this writing.
Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. –

What happened

Blink Charging (NASDAQ: BLNK) was among the several clean energy stocks that announced its first-quarter earnings in May. The dramatic jump in Blink Charging’s first-quarter revenue susprised many, but the electric vehicle (EV) charging stock still ended the month down 16.6%, according to data provided by S&P Global Market Intelligence.

Why should a growth stock growing its revenue at such a stunning pace fall? Blame weak investor sentiment.

So what

Blink Charging designs, manufactures, and operates EV charging stations. You’d expect the company to be busy installing and selling more and more chargers given how rapidly EV sales are rising. And that’s exactly what Blink Charging is doing.

Image source: Getty Images.

In its first quarter, Blink Charging contracted or sold 3,174 charging stations, almost double from the year-ago period. Blink Charging typically enters into long-term contracts with local companies and municipalities that own residential and commercial properties, and installs and operates charging stations for them while retaining a major portion of charging revenue. It also has a Blink-as-a-Service plan, under which property partners install stations and pay Blink Charging a recurring fee to operate them.

Revenue under most of these contracts constitute Blink Charging’s service revenue, which made up less than 20% of its total top line in the first quarter. The bulk of its $9.8 million in Q1 revenue came from sales of commercial, residential, and DC fast chargers. They’re in high demand — product sales shot up 382% year over year in Q1, although a large portion of that growth came from Blue Corner, a European charging operator Blink Charging acquired last year.

Blink Charging has a problem though: Its costs are rising nearly as fast as its revenue, which is why its net loss per share in Q1 doubled year over year to $0.36 per share.

Blink Charging’s operating costs are significantly higher than revenue, and that has investors worried about how much longer they’ll have to wait to see Blink Charging turn profitable despite operating in a high-growth industry.

The sell-off in growth stocks amid rising inflation and interest rates only exacerbated investors’ fears, which is why Blink Charging stock ended May on such a weak note.

Now what

Despite Blink Charging’s big losses and cash burn, investor interest in the stock is unlikely to wane. The EV industry is still in its nascent stage, and most players, from EV manufacturers to component suppliers to charging companies, are unprofitable as they’re still trying to establish a consumer base and grow revenue.

From that standpoint, Blink Charging’s revenue is growing at blistering speed and hit record highs last quarter. The company is also always on the lookout for acquisitions to expand its global footprint. In April, for example, Blink Charging acquired EB Charging, marking its foray into the U.K. In May, it struck a deal worth more than $3.7 million with a parking facility owner to deploy 600 charging points across the U.K. and Ireland.

Investors are perhaps taking note of these points, and see the recent plunge in Blink Charging stock that sent it all the way down to 52-week lows as an opportunity to buy the growth stock this month — the EV charging stock’s up about 12.6% so far in June, as of this writing.

Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

  • This field is for validation purposes and should be left unchanged.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Free Share Allocation Reward Levels

STARTER

Class
$ 2,500 Deposit & Trade
  • REWARD^
  • 1 x Marathon Oil Corporation (NYSE:MRO)

ECONOMY

Basic
$ 5,000 Deposit & Trade
  • REWARD^
  • 1 x Pfizer Inc (NASDAQ:PFE)

ECONOMY

Standard
$ 10,000 Deposit & Trade
  • REWARD^
  • 1 x Amazon.com Inc (NASDAQ:AMZN)

ECONOMY

Plus
$ 25,000 Deposit & Trade
  • REWARD^
  • 2 x Apple Inc (NASDAQ:AAPL)
POPULAR

BUSINESS

Class
$ 50,000 Deposit & Trade
  • REWARD^
  • 4 x Apple Inc (NASDAQ:AAPL)

FIRST

Class
$ 150,000 Deposit & Trade
  • REWARD CHOICES^
  • 12 x Apple Inc (NASDAQ:AAPL)
  • 2 x Tesla (NASDAQ:TSLA)
^Please refer to the Free Share Promotion Terms and Conditions for details.

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex Securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

FREE AAPL, TSLA, AMZN, PFE or MRO Share(s)
REGISTER TO BE ELIGIBLE FOR FREE SHARES
TRAVEL ACROSS THE FINANCIAL WORLD
Act Fast - Promotion Ends In
Click Here To Get Started
FREE AAPL, TSLA, AMZN, PFE or MRO Share(s)
REGISTER TO BE ELIGIBLE FOR FREE SHARES
TRAVEL ACROSS THE FINANCIAL WORLD
Act Fast - Promotion Ends In
Click Here For More Info