What happened
Investors in electric vehicle (EV) charging stocks got a shock on Friday -- the good kind -- when investment bank B. Riley initiated coverage of companies providing battery charging for electric cars, and named one of the leaders in this sector a buy.
The lucky recipient of that buy rating, California-based ChargePoint Holdings (CHPT 3.15%), is gaining 13.1% as of 2:45 p.m. ET this afternoon, while smaller rival Blink Charging (BLNK 7.61%) -- although it got only a neutral rating -- is up nearly as much at 12%.
Rounding out the list of today's hard chargers is San Francisco-based Volta (VLTA +0.00%). Although B. Riley didn't mention it at all, Volta stock is nonetheless up 10%.
NYSE: CHPT
Key Data Points
So what
Let's start with ChargePoint -- Riley's top pick for obvious reasons.
The biggest electric car charging network in America with a 70% market share, ChargePoint has amassed roughly "5,000 commercial and fleet customers globally," B. Riley notes. In addition to the company's "dominant" scale, B. Riley particularly likes the fact that ChargePoint doesn't own most of the actual charging stations in its network, but rather focuses on "product development, customer acquisition, and public policy," reports Street Insider. B. Riley recommends buying ChargePoint up to $25, and predicts the company could be doing $1.1 billion in sales by 2025 -- roughly in line with what other analysts are predicting, according to data from S&P Global Market Intelligence.
ChargePoint's asset-light approach offers advantages over Blink's strategy of owning its charging stations and getting revenue mostly from the sale of electricity at those stations. Going the route Blink has chosen is more expensive during the build-out phase, because Blink must engage in a "land grab," competing with other charging network operators to buy prime charging spots that are more likely to yield more electricity sales. For this reason, Blink gets only a neutral rating while ChargePoint gets a buy.
And what about Volta, you ask? The one B. Riley passed over? Volta is taking a sort of hybrid approach of operating charging stations itself and selling electricity, but also supplementing that income by outfitting each charging station with a large video screen showing commercials. The theory is that, since charging takes some time, customers sitting in their cars waiting on a charge are a captive audience that can be advertised to.
Now what
It's a clever idea Volta has come up with, and this helped the company to grow its revenue 77% last quarter. Still, at just $36 million in trailing-12-month revenue, Volta remains pretty small in the EV charging game. What's more, while Blink is smaller than Volta ($28.5 million in revenue), it's already growing much faster. Sales at Blink more than quadrupled last quarter.
All things considered, I suspect B. Riley is right to prefer ChargePoint over its rivals. With a market cap of $4.5 billion, ChargePoint is already far and away the investor favorite. With 101% revenue growth last quarter, it's outgrowing Volta. And while ChargePoint isn't growing quite as fast as Blink, its $282 million annual revenue stream is 10 times as big as Blink's already -- so Blink has its work cut out for it trying to catch up to the leader.
On Wall Street, most analysts seem to view this as a race between ChargePoint and Blink, with each company expected to turn profitable in 2026, and to earn similar levels of profit -- $0.17 per share for ChargePoint, versus $0.13 per share for Blink. (Volta isn't expected to turn profitable as far out as anyone is posting estimates.)
I don't place a huge amount of faith in analyst estimates. But if you do, well, earning $0.17 per share on a stock that costs $14 (ChargePoint) seems to me a better deal than earning $0.13 per share on a stock that costs $16 (Blink). While none of these three stocks looks really attractive to me, ChargePoint appears to be the closest thing to a bargain in the bunch.
