Here’s a picks-and-shovels play that some investors might not have considered. Given the anticipated proliferation of electric vehicles (EVs), surely there will be a need for EV chargers. This begs the question of whether Blink Charging (NASDAQ:BLNK) stock is a worthy addition to a forward-looking portfolio strategy.
Perhaps it is, but bear in mind that Blink isn’t the best-known EV-charging station provider. There’s a famous competitor that could prevent Blink Charging from gaining market share. However, it’s unclear whether that EV-charging rival is truly committed to the build-out.
Blink Charging stock’s harrowing round trip
A round trip can be enjoyable when it’s a car ride during a summer vacation. However, when it’s a round trip on a stock price, the road may be littered with the cadavers of investors whose trades are ill-timed.
Such seems to be the case with BLNK stock, which soared from $3 in 2020 to more than $50 in 2021, only to plummet back down to $3 recently. Interestingly, this may have had little to do with Blink Charging as a company.
Bear in mind that speculative fervor peaked in 2021 in the wake of post-pandemic stimulus and ultra-accommodative interest-rate policy. Amid that euphoric backdrop, it felt like every EV-related start-up, including Blink, would be the next millionaire-maker.
In hindsight, it’s obvious that reality was bound to set in sooner or later. When post-stimulus inflation took hold, the Federal Reserve implemented higher-for-longer interest-rate policy. The next thing you know, investors piled into comparatively safe-looking mega-cap stocks and abandoned EV-upstart plays like Blink Charging stock.
Tesla’s Supercharger network: Elon is off and on
However, Blink Charging must face another issue beyond macro-level considerations. In particular, Blink isn’t the best-known provider of EV-charging stations.
That title would certainly go to Elon Musk’s Tesla (NASDAQ:TSLA) with its vast and redoubtable Supercharger network. A year ago, Ford (NYSE:F) and General Motors (NYSE:GM) established agreements to use Tesla’s EV-charging network.
Those agreements dealt harsh blows to Blink, no doubt. Blink Charging has been around since 2009, but juggernaut Tesla could easily come along and steal market share in 2023 and 2024.
Yet, there are a couple of odd twists to this tale. In a move that Yahoo! Finance justifiably called a “head-scratcher,” Musk decided to lay off nearly all of Tesla’s Supercharger team.
It was an unexpected halt to the project’s momentum. Tesla’s network comprises 6,249 Supercharger stations and over 57,000 connectors, but evidently Musk wanted to substantially slow down the network’s build-out.
Not long after that, Musk posted this on his social-media platform, X:
Thus, mercurial Musk appears to be running cold and hot regarding the Supercharger network’s build-out pace. If you imagine that this is frustrating to Tesla’s shareholders, just consider how Blink’s investors must feel.
Like it or not, BLNK stockholders will need to keep one eye on the development of Blink’s network and another eye on Musk’s latest mood swings. It’s enough to give any logic-focused investor a migraine.
Blink’s surprising sales growth
At the same time, Blink’s shareholders should pay attention to the company’s financials. In some respects, Blink Charging is actually growing faster than Tesla is.
Indeed, some of Blink’s first-quarter financial figures seem to contravene the narrative that the EV industry is falling apart at the seams. On a year-over-year basis, Blink Charging managed to grow its revenue by 73% to $37.6 million.
Furthermore, Blink’s Q1-2024 gross profit ballooned 195% to $13.4 million. In addition, the company’s gross margin increased considerably, from 21% in the first quarter of 2023 to 36% in this year’s first quarter.
Alongside its financial highlights, Blink Charging delivered an exciting announcement not long ago. According to a press release, Blink “secured a contract as an official EV charging provider for the state of New York.” Blink’s tasks will include providing Level 2 and DC fast chargers and “installation, maintenance, repair” and other services.
Getting charged up about Blink Charging stock
Of course, Blink Charging is not a hugely profitable business like Tesla is. However, for what it’s worth, Blink’s net earnings loss is shrinking. Still, there’s no denying that BLNK stock is more speculative than a Magnificent Seven member like Tesla stock.
On the other hand, if Musk seems wishy-washy about the build-out of his company’s charging network, be assured that Blink Charging is all in and fully committed. I wouldn’t mortgage my house to load up on BLNK stock by any means, but at least it’s a pure EV-charging-station play with no hesitation or reservations. Thus, investors who don’t mind dealing with share-price volatility and the irritating-but-unavoidable impact of Musk’s antics should feel free to grab a few Blink shares.
