The Blink Charging share price has jumped more than 40% in the past month and, ahead of its Q2 earnings call on 8 August, investors will be hoping that the electric vehicle charging firm can achieve another record-beating quarter.
Blink Charging [BLNK] shares rallied in July, helping to reverse losses made earlier in the year. The uptick in investor sentiment is a positive sign ahead of the electric services company’s second quarter announcement on 8 August.
Though the stock is still down 15.1% year-to-date, the Blink Charging share price has climbed 41.2% in the past month to close at $22.50 4 August.
The company, which designs, manufactures, owns and operates electric vehicle (EV) charging stations, has struggled so far this year as growth stocks fall out of favour with investors. Despite a strong month, the shares are still underperforming the S&P 500, which has lost 12.8% since the start of the year in comparison.
In the runup to the EV charging equipment company’s second-quarter results, shareholders will be looking to see if it has been able to capitalise on steady growth in the EV industry, while stemming the impact of higher inflation.
Q1 revenues soar but losses widen
In the first quarter of 2022, Blink Charging saw a rapid increase in income after it ramped up product sales and service revenues. The company announced a record total revenue of $9.8m for the first three months of the year, up 339% from $2.2m in the same period of 2021.
Blink Charging has benefitted from the rapid adoption of EVs in the US in the past year. According to the US Department of Energy, EV sales grew by 85% between 2020 and 2021, with sales of electric and plug-in hybrid vehicles totalling around 608,000 last year. With EVs becoming increasingly common, Blink Charging has been able to capture more demand for charging stations across the country.
Despite the strong growth in revenues in the first quarter, operating expenses also increased. The company made a loss of $15m for the quarter, more than twice the $7.4m loss in the first quarter of 2021. A rapid rise in compensation costs for the quarter contributed heavily to the first quarter loss. Compensation nearly doubled from $4.7m in Q1 2021 to $9.3m in Q1 2022 — extremely high for a company only bringing $9.8m in quarterly revenue. Blink Charging will argue that high compensation is required to acquire the top talent needed to run a high-tech business, but the costs could be damaging to profitability.
The first quarter also saw Blink Charging acquire UK-based EB Charging for $23.4m. The deal marks the company’s first entry into the UK market and expands its presence to 19 countries. The acquisition will also see Blink Charging add more than 1,150 chargers to its network and involves the country in the UK’s ambitious EV charging plans with 300,000 public chargers targeted by 2030.
US increases EV infrastructure investment
The Blink Charging share price has been boosted in the last month by recent US government investment in EVs. The Biden administration has committed $5bn to the production of environmentally cleaner school buses, with half of this going into producing electric school buses.
The surge in electric school buses will naturally lead to increased demand for charging stations to power them. Blink Charging, which has already deployed 400 chargers to educational institutions in 14 states, will aim to be at the forefront in installing more chargers in schools across the US.
The investment has come alongside the $7.5bn that the Infrastructure Investment and Jobs Act (IIJA) had already set aside for improving electric vehicle infrastructure on US interstates. This series of investments signal that governments are becoming serious about improving infrastructure for EVs and Blink Charging could see strong growth in revenue over the next few years.
Ahead of 8 August earnings release, analysts share a reserved outlook on Blink Charging’s stock price. Of eight analysts polled by the Financial Times, five gave the shares a ‘hold’ rating while the remaining three believe shares will ‘outperform’. There were no ‘buy’ or ‘sell’ ratings from the analysts. From nine analysts giving the shares 12-month price targets, there was a median target of $19, representing a 13.9% downside on the 4 August closing price of $22.07.