If the global adoption of EVs increases, significant investment is required to build the necessary EV charging infrastructure. Therefore, a strong case exists for investing in high-quality EV charging stocks for multibagger returns.
Let’s start with some numbers to under the potential opportunity. The National Renewable Energy Lab estimates an investment of $31 to $55 billion is needed by 2030 to meet anticipated charging needs in the United States.
Similarly, the European EV charging industry is expected to reach $32.8 billion by 2030. Between last year and the decade’s end, the industry is expected to grow at a CAGR of 30.2%. There is ample headroom for growth even as competition intensifies.
This column discusses three EV charging stocks representing companies best positioned to capitalize on this opportunity. While there are bigger names like Tesla (NASDAQ:TSLA), I focus on emerging industry stars.
Blink Charging (BLNK)
Among the emerging companies in the EV charging industry, Blink Charging (NASDAQ:BLNK) is worth considering. BLNK stock has witnessed a deep correction of 67% in the last 12 months. I believe the stock has bottomed out and will likely rally in the coming quarters.
For 2023, Blink reported revenue growth of 130% yearly to $140.6 million. The current year’s growth guidance is relatively muted at 21% to $170 million. However, the key point is that Blink has guided for adjusted EBITDA break-even by Dec. 2024.
With a presence in the U.S. and Europe, operating leverage will ensure that the margin expansion sustains beyond this year. It’s also worth noting that the company’s new manufacturing facility is operational in Washington, D.C. In-house manufacturing will also support the margin expansion story.
With the move towards profitability, strengthened balance sheet and positive industry tailwinds, BLNK stock is positioned for massive upside.
EVgo (EVGO)
EVgo (NASDAQ:EVGO) stock has remained weak, with profitability being a concern. However, it’s worth noting that the stock has remained sideways in the last five months. With multiple reasons to be positive, I expect a strong reversal for EVGO stock from current levels.
For Q4 2023, EVgo reported stellar revenue growth of 83% yearly to $50 million. Even for the full year, revenue was higher by 195% at $161 million. Revenue growth has been robust and I expect healthy growth to sustain in the coming years.
It’s also worth noting that for 2022, EVgo had reported an adjusted EBITDA loss of $80.2 million. For last year, adjusted EBITDA losses narrowed to $58.8 million. The company has guided for an adjusted EBITDA loss of $39 million (mid-range) for the current year. Further, EVgo expects adjusted EBITDA break-even by 2025. EVgo ended 2023 with a cash buffer of $209 million. I don’t see any near term need for fundraising through equity dilution.
Wallbox N.V. (WBX)
Wallbox (NYSE:WBX) stock is another massive underperformer likely to make a strong comeback. The company provides residential, commercial and software solutions as an overview.
For Q4 2023, Wallbox reported 43.3 million euros in revenue and an adjusted EBITDA loss of 14.7 million euros. It’s worth noting that revenue increased by 34% on a year-on-year basis. Additionally, the company has guided for positive adjusted EBITDA in Q2 and for the full year 2024. If this target is achieved, I expect a strong rally for WBX stock from deeply oversold levels.
It’s worth noting that in Q4 2023, Wallbox acquired ABL, Germany’s leading EV charging company. Further, last year, the company introduced several new products, including Pulsar Pro, Supernova 150 and WallboxCare.
Both these factors are likely to contribute to accelerated top-line growth in 2024. Wallbox also ended 2023 with a cash buffer of 107 million euros. This provides flexibility to invest in organic and acquisition-driven growth.
On the date of publication, Faisal Humayun did not hold (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.
