The ongoing electric vehicle (EV) boom has been driving the EV component market and the demand for batteries, charging infrastructure and ancillary components has been growing consistently.
However, the shares of many charging infrastructure companies have soared over the past year based solely on bullish market sentiment regarding the core EV industry. Moreover, the EV charging market is relatively new and still under development.
An uncomfortably high percentage of floating shares of Blink Charging Co. (BLNK) and Chargepoint Holdings Inc. (CHPT) have been sold short recently, indicating that investors expect these shares to retreat in the near term.
Click here to checkout our Electric Vehicle Industry Report for 2021
Blink Charging Co. (BLNK)
BLNK is a Florida-based provider of EV charging equipment and networked EV charging services in the United States. It offers residential and commercial EV charging equipment that enables EV drivers to recharge at various location types. The company’s EV charging network is a proprietary cloud-based software that operates, maintains, and tracks all of Blink’s EV charging stations and associated charging data. Currently, 48.8% of BLNK’s floating shares have been sold short.
Last month, Hagens Berman and Pomerantz LLP filed a consolidated amended complaint in a securities fraud class action lawsuit pending against Blink and some of its senior executives. The lead plaintiffs in the suit have alleged that BLNK misrepresented and concealed the size and functionality of its electric vehicle charging station network. They also allege that BLNK’s public charging station network was littered with obsolete and inoperable chargers, which the company refused to service or replace. Analyst Culper Research also published a scathing report last year accusing the company of vastly exaggerating the size of its EV charging network. The lawsuit and the analyst report added to other woes suffered by the company’s business operations, which was already disrupted due to the COVID-19 pandemic.
The pandemic affected the company’s third quarter results. BLNK has faced challenges with logistics, shipping delays, and a decrease in driving patterns that have impacted utilization of its services. BLNK’s charging service revenue has decreased 48.8% year-over-year to $162,654 in the third quarter, ended September 30, 2020. Its loss from operations has risen 40.3% from the year-ago value to $3.91 million, while its net loss per share has increased 20% to $0.12 over the same period.
Analyst expects BLNK’s loss per share to rise 9.1% year-over-year to $0.12 in the about-to-be reported quarter (ended December 31, 2020), and by 27% to $0.47 in its fiscal 2020. The company missed the Street’s EPS estimates in each of the trailing four quarters. The stock has lost 17.3% in value year-to-date.
BLNK’s POWR Ratings are consistent with this bleak outlook. The POWR Ratings are calculated by considering 118 different factors with each factor weighted to an optimal degree.
The stock has an overall rating of F, which equates to Strong Sell in our proprietary rating system. BLNK has a grade of F for Stability, Sentiment, Value, and Quality.
In total, we rate BLNK on eight different levels. Beyond what we’ve stated above, we have also given BLNK grades for Momentum and Growth. Get all BLNK’s ratings here.
Chargepoint Holdings Inc. (CHPT)
CHPT operates a network of electric vehicle charging stations in California. The company develops and markets networked electric vehicle charging system infrastructure and cloud-based services that are designed to include options for every charging scenario--from home and multifamily to workplace, parking, hospitality, retail and transport fleets of all types. Currently, 35.1% of CHPT’s floating shares have been sold short.
Last month, CHPT completed its business combination with Switchback Energy Acquisition Corporation, a special purpose acquisition company, at an implied $2.4 billion enterprise value. Following the merger, Chargepoint began trading on March 1 at the New York Stock Exchange.
ChargePoint. Had a loss from operations of $85.67 million for the nine-month period ended October 30, 2020. Its net loss has increased 5.7% from the same period last year to $106.28 million, while its net loss per share has risen 2.4% to $12.55 over the nine-month period.
CHPT is an early-stage company with a history of losses and expects to incur significant expenses and continuing losses in the near term. Its potential profitability is particularly dependent on the continued adoption of EVs by consumers and fleet operators, and the widespread adoption of electric trucks and other vehicles.
Analysts expect CHPT to report a loss per share of $0.07 in the about-to-be reported quarter (ended January 31, 2021). A consensus revenue estimate of $138.75 million for fiscal 2021 (ended January 31) indicates a 4% decline from the previous year.
The POWR Ratings are calculated by considering 118 different factors with each factor weighted to an optimal degree.
Click here to checkout our Electric Vehicle Industry Report for 2021
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CHPT shares were trading at $29.97 per share on Thursday morning, up $1.34 (+4.68%). Year-to-date, CHPT has declined -25.22%, versus a 5.49% rise in the benchmark S&P 500 index during the same period.
About the Author: Rishab Dugar
Rishab is a financial journalist and investment analyst. His investment approach is to focus on quality stocks, trading at low prices, with business models that he readily understands.
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