Blink Charging Co. Is No Flash In The Pan
After careful review of Blink Charging Co.’s (NASDAQ: BLNK) insider activity, we have come to the conclusion that insider selling capped gains earlier this year and may do so again. But there’s a caveat here. Insider selling isn’t the bad news that it could be and there are still big gains to be made. The company recently reported its calendar Q3 earnings report and really wowed the market. The company beat on the top and bottom lines and provided a favorable outlook on rising demand for EV infrastructure. One of the biggest hurdles for mass electrification of vehicles is infrastructure such as charging stations but that is changing.
Turning to insider activity, there has been some noteworthy insider activity over the past 12 months. Insiders, primarily two larger shareholders including CEO Michael D. Farkas, sold about 2.0% of shares outstanding capping gains in the stock. The takeaway for investors is that insider ownership remains very high at 17% and the sales were very, very opportunistic. The bulk of sales were made in January and early February 2021 when shares prices were trading at record highs. The paper gains at that time were in the range of 3400% so it is no wonder some profits were taken off the table. Another factoid to balance out the selling is that Donald Engel, the other large shareholder selling this year, has also been a buyer and exercising options.
Blink Charging Is Entering Hyper-Growth Phase
With the need for EV infrastructure how it is and the company’s results pointing to accelerating growth, we are predicting a hyper-growth phase for Blink Charging that could double the business’s size numerous times over the next several years. The company posted a record $6.4 million in net revenue for the quarter, still a very tiny amount, but up more than 600% from last year with strengthening tailwinds in the business. The gain was driven by a 766% increase in product sales that includes a 352% increase in stations deployed coupled with a 425% increase in service revenue.
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Moving down the report, the earnings results were weaker than expected but there are good signals in the details. The company was able to lower its operating costs in tandem with scaling which bodes well for profitability but those gains were offset by other costs. Those other costs are primarily related to hiring and advertising as the company scales the business. In our view, that’s a good reason to miss the consensus.
The Analysts Are Electrified By Blink Charging Co
Blink Charging Co has a surprising number of analysts following it for being such a small, early-phase company. There are five current ratings with a consensus sentiment of Weak Buy and price target of $33.50. The consensus price target assumes 6% downside for the stock after the post-release pop in share prices and we think that gap is going to widen. There has been no activity from the sell-side community since the release but we would be surprised if it didn’t come to a simmer very soon. It’s not like there isn’t a giant green-leaning infrastructure bill about to be signed into law to help stimulate activity, either.
The Technical Outlook: An Updraft In Blink Shares Has Begun
Shares of Blink Trading Co. gained more than 8.0% in the wake of the earnings release and look like they will continue higher. Price action is confirming support at the 150-day moving average and the indicators are bullish as well. The MACD and stochastic are firing what we consider to be a strong entry signal in tandem with bullish price action so the coming gains could be large. There may be some resistance at the $43 level but, once that is broken down, the door will open for a move up to the $60 range or about 70% upside from the current price action.
Companies in This Article:
|Company||Current Price||Price Change||Dividend Yield||P/E Ratio||Consensus Rating||Consensus Price Target|
|Blink Charging (BLNK)||$38.40||+0.6%||N/A||-34.91||Buy||$38.50|