On Tuesday, Needham adjusted its stance on shares of Blink Charging Co. (NASDAQ:BLNK), shifting from a "Buy" to a "Hold" rating. The firm has removed its previous price targets for both BLNK and ChargePoint (NYSE:CHPT) Holdings Inc. (NYSE:CHPT), citing a lack of clear signs of market recovery. The analyst noted that ChargePoint was the first to indicate market challenges, revising its revenue forecasts downward in late 2023.
Despite Blink Charging's strong revenue growth in 2023, driven by the enthusiasm of auto dealerships and original equipment manufacturers (OEMs) for electric vehicles (EVs), the company has struggled to maintain growth in 2024.
Both companies have managed to leverage their operational expenses commendably. However, the anticipated rise in adjusted EBITDA profitability has been delayed due to stagnant revenue growth. While the analyst acknowledges a potential increase in demand for charging equipment, due to the growing number of EVs on U.S. roads compared to the available charging infrastructure, the timing of this demand is now uncertain.
The change in White House leadership has contributed to the uncertainty regarding a stable ordering cycle for charging equipment, which would be beneficial for both Blink Charging and ChargePoint. This political shift has diminished confidence in a reliable market for the companies' products, prompting the revised rating and the removal of the price targets.
The analyst's comments highlight a cautious outlook for the EV charging sector, as industry players navigate through a period of unpredictability and wait for clearer market signals.
In other recent news, Blink Charging has seen a series of recent developments. UBS analyst William Grippin downgraded Blink Charging's stock rating from Buy to Neutral, following a reassessment of the electric vehicle adoption rates and their impact on the company's sales forecast. The company's price target was also reduced to $2.00. This was due to an expected slowdown in EV adoption which could negatively impact Blink Charging's sales projections.
In addition to this, Blink Charging has formed a strategic partnership with ChargeHub to expand its electric vehicle charger access. This partnership aims to enhance user experience by integrating Blink's public EV chargers into ChargeHub's Passport roaming hub, providing access to over a million ChargeHub users.
Blink Charging reported a third-quarter revenue of $25.2 million, falling short of the projected $36 million. Despite this, the company managed to improve its gross margin to 36%, up from 29% the previous year. In terms of infrastructure growth, Blink reported a 70% sequential increase in charger deployment, totaling 6,978 units globally. The company anticipates positive adjusted EBITDA in the second half of 2025.
Benchmark maintains a Buy rating for Blink Charging, anticipating a rebound in the company's product sales. These are the latest developments for Blink Charging.
InvestingPro Insights
The recent downgrade of Blink Charging (NASDAQ:BLNK) by Needham aligns with several key metrics and insights from InvestingPro. The company's market capitalization stands at a modest $159.86 million, reflecting the challenges it faces in the current market environment.
InvestingPro data shows that Blink's revenue growth has slowed significantly, with a 41.93% decline in quarterly revenue as of Q3 2024. This aligns with the article's mention of the company's struggle to maintain growth in 2024. Additionally, the operating income margin of -51.57% underscores the profitability concerns raised by analysts.
InvestingPro Tips highlight that Blink is "quickly burning through cash" and "not profitable over the last twelve months," which supports the analyst's observation about delayed adjusted EBITDA profitability. The stock's performance has been notably poor, with a 59.59% decline over the past year and a 51.98% drop in the last six months, reflecting the market's uncertainty about the company's prospects.
These insights from InvestingPro provide additional context to the article's discussion of the challenges facing Blink Charging and the broader EV charging sector. Investors seeking a more comprehensive analysis can access 15 additional tips on InvestingPro, offering a deeper understanding of Blink Charging's financial health and market position.
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