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Why Blink Charging Is Plunging Despite 177% Growth in Sales

By Neha Chamaria – Aug 12, 2021 at 1:36PM

Key Points

  • Blink Charging reported solid growth in product and services revenue in the second quarter.
  • Its costs, however, rose at a wider clip as the company scales its business.
  • The EV industry has tremendous potential, but investors in Blink Charging should beware.

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Losses are mounting for the electric vehicle charging stock, but that's not the only thing investors should know.

What happened

Blink Charging (BLNK 0.35%) stock is tumbling today and was down 10.8% as of 10:45 a.m. EDT. Blame its second-quarter numbers that were released on Aug. 11 after market close.

To be sure, Blink Charging's sales growth absolutely crushed Wall Street estimates, but a larger-than-expected loss is weighing down the electric vehicle stock. Here's all you need to know.

So what

Consensus estimates called for 55% growth in Blink Charging's second-quarter revenue and a loss of $0.16 a share.

The electric-vehicle charging company's revenue jumped a whopping 177% year over year to $4.4 million, but it incurred a loss of $13.5 million, or $0.32 per share. Management cited two broad reasons for the loss: higher compensation and general and administrative expenses.

Compensation expenses nearly quadrupled to $9.2 million and G&A expenses more than tripled to $2.5 million, both year over year. The thing is, Blink Charging expanded its management team during the quarter with several new appointments, including Harjinder Bhade as chief technology officer and Miko de Haan as managing director of its European subsidiary, Blink Holdings BV.

Both Bhade and de Haan bring rich experiences in the EV charging industry with them.

A worried person in a car.

Image source: Getty Images.

The market, however, doesn't seem to have noticed the big jump in Blink Charging's charging services revenue: Unlike the first quarter when its services revenue declined, it surged 572% year over year in Q2 as the economy reopened and more drivers used the company's charging stations. Meanwhile, sales from products like Generation 2 chargers, DC fast chargers, and residential chargers climbed 156% year over year.

Blink Charging contracted, sold, or installed 3,264 commercial and residential EV charging stations in Q2 versus only 380 in Q2 2020.

It was a busy quarter, and some of Blink Charging's notable moves during the quarter include:

  • An acquisition of Blue Corner, a European EV charging operator and owner of more than 8,700 charging ports.
  • An agreement with General Motors to offer GM's EV customers access to Blink Charging's charging sites.
  • The installation of its first set of Blink HQ 100 chargers for Nissan Motor Leaf vehicles in the Chilean capital of Santiago.
  • An agreement to deploy charging stations at Israel's leading hospitality group, Fattal.

One thing's clear: Blink Charging is focused on expanding its international footprint. That's necessary, given that the company doesn't really offer any innovative or disruptive product but relies solely on the EV industry's growth to grow.

Now what

Blink Charging's Q2 sales growth was undeniably impressive, but the company barely generated $6.6 million in sales through the first half of 2021, is far from profitability, and continues to sell shares to raise cash. Those are things investors in electric vehicle stocks may want to keep in mind before dipping their fingers into a stock commanding a market capitalization of nearly $1.39 billion even after today's drop.

Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Stocks Mentioned

Blink Charging Stock Quote
Blink Charging
BLNK
$14.47 (0.35%) $0.05
General Motors Stock Quote
General Motors
GM
$38.95 (-2.39%) $0.95
Nissan Motor Stock Quote
Nissan Motor
NSANY
$6.78 (-3.90%) $0.28

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