Why Blink Charging Stock Could Easily Double or Triple

BLNK Stock Set to Rise Due to Opportunities in EV Market

Technology and growth stocks have continued to trend lower. The Nasdaq is at multiyear lows and is failing to attract a response from buyers. Support at the 10,000 level is under attack.

That’s the bad news. The good news is that, given the recent share-price deterioration and renewed selling capitulation, there are aggressive opportunities for contrarian investors who are willing to accept risk.

For instance, the $430.0-billion Inflation Reduction Act will help electric vehicle (EV)-related companies like Blink Charging Co (NASDAQ:BLNK). The U.S.-based company builds EV-charging stations.

Blink Charging stock recently went down by 40% to a 52-week low of $13.53 on October 13. As of this writing, the share price remains at a level where the risk/reward trade-off is compelling.

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My bullishness for BLNK stock is based on the strong tailwinds in the domestic and global EV-charging infrastructure market.

Blink Charging Co is still in its early stages of business growth, and much of what happens next will depend on the level of demand for EVs. The fact is, though, the demand for EVs will continue to rise, which will power the growth of EV stocks like Blink Charging stock.

Blink Charging Co Set for Explosive Financial Growth

Blink Charging Co is in its early stages of growth, which translates to a speculative situation that could pay off.

The company’s five-year revenue picture reflects the early-stage status of Blink Charging Co, but the situation is expected to improve significantly.

At its high, the company had a massive valuation of $3.4 billion, and even after its valuation fell to $708.0 million, Blink Charging stock is priced for enormous forward growth. This makes it vulnerable, especially in the current high-risk economic climate.

Fiscal YearRevenues (Millions)Growth
2017$2.4N/A
2018$2.69.8%
2019$2.85.7%
2020$6.2125.8%
2021$20.9236.1%

(Source: “Blink Charging Co.” MarketWatch, last accessed October 20, 2022.)

Analysts estimate that Blink Charging Co’s revenues will increase by 156.4% to $53.7 million this year and by 73.1% to $92.9 million in 2023. (Source: “Blink Charging Co. (BLNK),” Yahoo! Finance, last accessed October 20, 2022.)

That would be solid revenue growth, but this gives Blink Charging Co a premium valuation of 8.3 times its 2023 revenue estimate.

As the company works on expanding its revenue base, I don’t expect to see it report positive earnings before interest, taxes, depreciation, and amortization (EBITDA); generally accepted accounting principles (GAAP) earnings; or free cash flow for years.

Compelling Risk/Reward Trade-Off With BLNK Stock

The below chart shows a large rally by Blink Charging stock at the end of 2020. BLNK stock traded at $64.50 in January 2021 prior to entering a downward channel, which currently remains in place.

Chart courtesy of StockCharts.com

Blink Charging stock needs to find support. The downside risk is $10.00. If BLNK stock can hold at the channel support level, look for it to move toward its 50-day moving average at $20.62, followed by its channel resistance level around $25.00.

I expect stock traders to remain cautious until the company’s fundamentals improve. A strong and sustained breakout could see Blink Charging stock eventually move toward the range of $30.00 to $40.00.

Analyst Take

Institutions and company insiders like Blink Charging Co. About 260 institutions hold 26.2% of the outstanding shares of BLNK stock, and insiders purchased a net 595,453 shares over the last six months. (Source: Yahoo! Finance, op. cit.)

Nevertheless, the broader stock market has been betting against Blink Charging with a large short position. As of September 15, there were 10.5 million shorted shares, representing 23.2% of the float. The short sellers have been right so far, but given BLNK stock’s price weakness, the downside moves might be more limited.

If stock market sentiment improves and Blink Charging stock attracts investors, I expect to see short-covering support buying. And if the demand for EVs continues to increase, there will be strong tailwinds for EV stocks like BLNK stock.