Blink Charging Pre-earnings Analysis
Chart done on hourly timeframe. Approximately 1.4 million electric vehicles were sold in the United States in 2023 and that number is expected to rise by 20% in 2024, which brings a ton of opportunities for companies involved in the space. Blink is one of those companies who is still making a name for themselves, but have been around for enough years to show their abilities. The company has come a long way in recent years with the rise in EV sales, boosting their revenue from just about 2M in 2017 to more than 140M in 2023, clearly reflecting healthy growth as demand in the industry increases. Unfortunately net income has moved in the wrong direction despite the massive revenue gain. This is largely attributed to operating costs and high interest rates, but as interest rates come down next year, Blink may show turnaround on their profitability. Their balance sheet is small, but still reflects a positive 4:1 ratio, which is healthy, but their free cash flow is in the negative, placing them in a high risk category.
Companies like Blink are awaiting The Fed to lower interest rates and for more liquidity in borrowing in order to grow more rapidly and post better numbers. Jerome Powell indicated a potential interest rate cut in July so if the company’s leaders take that into account, then they might post better guidance than markets expect. There’s a future for Blink, but it might take another 6-12 months to come around. This is a high risk high reward type of investment.
Option chain analysis:
Blink’s option chain that expires on May 17th 2024 (Mid month) currently reflects an implied volatility reading of 137%, which translates to about a $.62 move from the underlying stock. The direction of that move will depend on the earnings results and call.