Should I Buy Blink Charging (BLNK)? Finance YouTuber Analysis

Travis Hoium advises avoiding Blink Charging due to fundamental business challenges. He argues that the charging network business is commoditized, making it difficult for Blink to achieve profitability. The company's revenue growth has stalled, operating expenses remain high relative to gross profit, and its cash reserves are dwindling, making future financing difficult without significant shareholder dilution or unattractive debt terms.

“I add all of this up and this is a stock that I would absolutely avoid and it's gotten so small that it's going to be even harder to finance the company in the future.”

The YouTuber suggests avoiding Blink Charging, placing it in the same category as ChargePoint. The rationale is that the business model of selling EV charging infrastructure is not proven to be profitable, as it involves delivering a commodity (electricity) through a standardized plug, leading to a lack of pricing power and unsustainable operations.

“I would put Blink Charging in this same category and all the other charging Network companies.”

The YouTuber, who has historically been negative on Blink Charging, is now more intrigued due to the stock's 95% drop from its peak, improved financial trajectory towards adjusted EBITDA profitability by December 2024, and a current valuation of less than two times sales. However, he is not yet ready to buy, awaiting Q4 results and further observation in 2024, emphasizing the need for the company to prove it can be profitable as a manufacturing entity.

“not yet ready to buy the stock but I want to hear what management thinks after the fourth quarter results are announced and watch this company throughout 2024 because because there could be untapped upside with blink charging”

Despite phenomenal revenue growth, the YouTuber advises caution with Blink Charging because its losses are larger than its revenue, indicating it's burning more money than it generates. He questions the long-term profitability of selling a commodity (electricity) through a commodity plug.

“I don't think selling a commodity electricity through a commodity plug which is what standardized plugs are even if you're moving to the nacs standard in North America I don't know where that generates profit long term”

The YouTuber advises avoiding Blink Charging due to its persistent unprofitability, negative net income, and cash burn. He points out that the company's significant spending on sales and marketing does not translate to bottom-line profits, and the commoditized nature of EV charging products, especially with Tesla's standard, further exacerbates its challenges, suggesting a potential need for restructuring.

“I would not be surprised if both of them need to go through a restructuring sometime over the next five years because their future does not look very bright in their current business model.”

The analyst views Blink Charging as selling a commodity service with no proprietary advantage, leading to a low-margin business. Despite revenue growth, the company's losses and cash burn have worsened, raising concerns about its ability to raise future capital as its market cap drops. The analyst believes it lacks a path to profitability or positive free cash flow.

“This is not a company that I think has profitability in its future or positive free cash flow in its future and as a result it's just one to avoid”

Travis Hoium advises investors to avoid Blink Charging, arguing that EV charging, like gasoline sales, is a low-margin commodity business. Despite revenue growth, the company is losing money, and the adoption of Tesla's charging standard will not significantly change the fundamental economics of the industry to make it highly profitable.

“I want to caution investors away from is this is not going to be a big money maker for Tesla. I'll pull up here the revenue and net income numbers for Blink charging and ChargePoint. These would be the two biggest third party charging companies but this is consistent across the board no matter which one of these charging stocks you look at revenue is growing that's absolutely true but they're losing money like crazy.”

The YouTuber recommends avoiding Blink Charging, citing its significant financial losses, with the company losing more money than it generates in revenue. He believes the EV charging business model is commoditized, lacking a sustainable competitive advantage or profitability, making it a poor long-term investment.

“these are stocks that I would absolutely not want to have in my portfolio I don't know if they're going to go up or down based on speculation short term but long term this is not a story that ends well for investors so I would stay away from electric field charging stocks right now”

The analyst suggests avoiding Blink Charging, along with other charging stocks, because they are unproven and operate in a commodity market with low profit potential. He believes these companies struggle to generate recurring revenue and profit, making them poor investments until they demonstrate a more sustainable business model.

“That's why I don't think investors should be taking a risk on chargepoint or blank charging or any of the other charging stocks that are out there they're just simply too unproven and until they can be viewed as value stocks that can generate recurring Revenue year after year and generate a profit from that it's simply a space I'm going to stay out of”

The YouTuber views Blink Charging as a cheaper buy compared to EVgo, trading at just four times this year's expected sales. Despite falling earnings expectations, triple-digit revenue increases are anticipated, and the company could benefit from infrastructure bill funds and increased EV demand.

“but I think blank is the cheaper buy here at just four times this year's expected sales.”

The YouTuber believes Blink Charging could prove short sellers wrong over the next year or two. He views it as a long-term investment, suggesting its current short interest is due to temporary weakness.

“i think blink charging could prove the shorts wrong over the next year or two”

The YouTuber suggests Blink Charging for its strong presence in the Eastern US, diverse product line, and rapid sales growth. He notes its strong balance sheet with significant cash and low debt, despite a high price-to-sales ratio, indicating investors are paying for faster growth.

“growth is even faster here with 72 sales growth this year and 126 even during the pandemic.”