After a solid top-line performance in Q2, H.C. Wainwright analyst Sameer Joshi, who happens to be a five-star analyst on TipRanks, maintained his bullishness on electric vehicle (EV) charging products and services provider Blink Charging (BLNK). This was despite the wider year-over-year net loss reported by the company.
SemaConnect Acquisition Proving to be Fruitful
Joshi was upbeat about the contribution of newly-acquired EV infrastructure company SemaConnect to Blink’s product revenues. Despite being under Blink’s wings for only about 10-15 days in Q2, SemaConnect had a strong hand in pulling product revenues 10% above the Q1 figure.
The company noted that had the acquisition been completed on January 1, 2022, instead of mid-June, Blink could have generated $32.4 million in revenues in 1H22 as a combined company instead of $21.3 million. This led Joshi to conclude that SemaConnect must have garnered $11 million to $12 million in revenues in that short period.
Blink’s Threats & Opportunities
The analyst took into account the headwinds that continue to roil the market and guided a conservative $28.6 million in revenue for 2H. Supply constraints, limited facilities for electric charging, inflation, and the like are weighing heavily on the industry. Still, Joshi believes that Blink is poised to benefit from the Infrastructure Bill passed last year, which sets aside $7.5 billion for EV charging. Moreover, the recently-passed Inflation Reduction Act will drive EV adoption, according to Joshi.
Though the company is not yet profitable, Blink’s own-and-operate operating model places it in a favorable position to generate higher recurring revenues over the mid-to-long term, supported by higher demand for EV charging. “We are projecting Blink’s revenues to increase from $49.9 million in 2022E to $1.6 billion in 2032E, at a ten-year CAGR of approximately 41.5%,” estimated Joshi.
Moreover, the analyst is also optimistic about the margin growth opportunities that the SemaConnect acquisition has opened. “Over the next few years, the company expects to increase SemaConnect’s manufacturing capacity from approximately the current 10,000 units per year to over 50,000 units per year with minimal capital expenditure; this scaling should also help boost margins,” observed Joshi.
With these observations, Joshi reiterated a Buy rating on the stock with a price target of $50.
What is the Price Target for BLNK Stock?
Wall Street is currently cautiously optimistic about the company, with a Moderate Buy rating based on two Buys and three Holds. The average price target for BLNK is $25.60, implying 19.4% upside potential.
Conclusion: Is BLNK Stock a Buy?
Blink’s position in the EV industry seems to be strengthening, particularly after the government’s initiatives to expand the EV market in the U.S. Growth opportunities for both the top-and-bottom lines are immense, with the upbeat projection of the EV industry as well as Blink’s strategic acquisition of SemaConnect. Combined with bullish analyst ratings, specifically the one from Sameer Joshi, BLNK is a stock to consider for the long term.
