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Why Blink Stock Blipped Higher Today

By Rich Smith – Nov 17, 2021 at 2:21PM

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Stifel thinks Blink is worth more -- but still not as much as it costs.

What happened

Shares of electric car-charging network-builder Blink Charging (BLNK 7.45%) inched up 2.9% through 1:50 p.m. ET Wednesday -- and for the most tenuous of reasons:

A higher price target from Stifel Nicolaus. 

Green line heart monitor shows a big jump.

Image source: Getty Images.

So what

This morning, investment bank Stifel upped its price target on Blink stock -- and not by a little.

Stifel's price target hike to $39 a share values the stock more than 34% above the banker's previous price target of $29. And yet, $39 a share happens to still be a good 16% below what Blink stock sells for right now. While the analyst's move was therefore relatively good news for investors, objectively speaking, Stifel still thinks Blink costs too much.

Now what

I agree. On the one hand, yes, Blink is perhaps one of the companies you can expect will most directly benefit from the $7.5 billion in spending on car charging networks contained in President Biden's now-both-passed-and-signed $1.2 trillion infrastructure bill. It's also a company that's finally growing rapidly, with sales up more than sevenfold in the most recent quarter.

On the other hand, though, as Stifel pointed out in a note covered on today, Blink missed earnings for the quarter. While revenues ran up strongly, costs increased even faster, with "total cost of revenues" rising tenfold, and operating costs in Q3 2021 four times what they were in Q3 2020.  

Result: Blink saw its per-share net losses triple in the quarter. Even though Stifel says investors can "expect robust top-line growth to continue" as the infrastructure program rolls out, Blink hasn't yet demonstrated that it can translate strong revenue growth into dependable profits.

Rich Smith 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.

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