EV charging stocks have been having it rough lately due to the slowdown in the EV market. However, it’s tough to write them off so quickly, especially considering the massive long-term growth potential in the EV sphere. On top of that, once the Federal Reserve starts cutting interest rates, interest in riskier bets, such as EV-charging stocks, is likely to increase substantially.
BloomBergNEF’s newsletter earlier this year echoed the concerns surrounding the EV market. It is expected to slow down in 2024, but the market should pick up the pace in the following couple of years. The release of cheaper EV models is likely to drive the market forward. However, despite the pullback, global passenger EV sales should still increase an incredible 22% this year to 16.7 million.
Therefore, with the likely surge in EV sales, the need for chargers is a given. In fact, in an article by Ian Cooper, my colleague at InvestorPlace, “the U.S. has just under 130,000 publicly available charging ports at 50,401 charging stations.” Here are three EV charging stocks you’d want to bet on for the long haul.
ChargePoint (CHPT)
Given its current positioning, investing in EV charging giant ChargePoint (NYSE:CHPT) would seem odd. CHPT stock shed a whopping 82% in value last year and has lost more than 70% in value in the past six months alone. Moreover, it reported another debilitating net loss in the fourth quarter (Q4), with a double-digit drop in its top line. Therefore, on paper, CHPT stock is one you’d probably want to steer clear of.
However, CHPT remains a worthwhile bet at current prices for those willing to stomach the risk. For starters, CHPT stock is down 82.30% from its 52-week high price of $10.71; the negativity seems priced in. Furthermore, once the market headwinds clear out, it is within the company’s reach to generate double-digit sales growth again. From Q4 2022 to the second quarter (Q2) 2024, the firm posted more than a 35% increase in sales on a year-over-year (YOY) basis. Consequently, CHPT stock is assigned a ‘moderate buy’ rating from Tipranks and a 113% upside potential.
EVgo (EVGO)
Unlike ChargePoint, EVgo’s (NASDAQ:EVGO) financials continue to impress. Its Q4 sales shot up 83.11% YOY to $50 million, beating market estimates by $5.70 million. For the full year 2023, its sales were up $161 million compared to $54.6 million YOY, representing a whopping 195% increase. Likewise, its adjusted EBITDA loss came in at $14 million, ahead of estimates by $17 million. Also, its overall customer count of 884,000 surged 60% YOY. Company CEO Badar Khan commented on EVgo’s fantastic results, complementing the firm’s focus on customer experience, digital-first approach, and station development.
Furthermore, RBC Capital analyst Christopher Dendrinos recently upgraded the stock to ‘outperform’ from ‘sector perform.’ He talks about how low barriers to entry for relatively smaller players in the EV market amidst high interest rates should favor EVgo. This competitive edge should result in greater top-and-bottom-line gains for the company. According to analyst estimates, EVGO’s loss-per-share is expected to improve to 26 cents in fiscal 2025 from 41 cents in fiscal 2024.
Blink Charging (BLNK)
Like EVGO, Blink Charging’s (NASDAQ:BLNK) financials continue to impress. It has a lot to do with Blink’s robust integrated business model. The company sells charging equipment and directly operates charging stations, enabling it to tap into multiple revenue streams. Selling charging equipment is a low-margin business but provides a steady income source. On the flip side, operating its charging networks offers higher margins through recurring revenue from charging services. This multifaceted approach positions BLNK more favorably than its competition in consistently posting strong quarterly sales figures.
In its most recent quarter, its non-GAAP EPS of negative 28 cents missed estimates by a couple of cents. Revenues were $42.7 million, roughly 88.9% higher on a YOY basis, beating estimates by $8.65 million. Product and service revenues increased 138% and 111% for the whole year, respectively. Additionally, it ended 2023 with record gross profits of $40.2 million.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
