On Thursday, UBS analyst William Grippin issued a downgrade for Blink Charging Co. (NASDAQ:BLNK), adjusting the stock's rating from Buy to Neutral. The price target for the company's shares was also reduced to $2.00, a decrease from the previous target of $3.00. The downgrade follows a reassessment of the electric vehicle (EV) adoption rates and their impact on the company's product sales forecast.
Grippin noted a heightened likelihood of slower EV adoption, which could adversely affect Blink Charging's sales projections. As a result, UBS has lowered its sales estimates for the years 2024, 2025, and 2026 to $126 million, $141 million, and $191 million respectively. These figures represent a downward revision from the prior estimates of $142 million, $190 million, and $259 million.
The UBS analyst highlighted that the revised 2025 revenue estimate stands 15% below the consensus. However, it appears that the market may have already adjusted to this outlook, as Blink Charging's shares have declined by 17% following the U.S. Presidential election.
This downturn reflects the market's growing concern over EV policies and adoption rates, which could influence commercial and fleet customers' purchasing decisions regarding EV charging equipment.
Commercial applications, which make up approximately 90% of Blink Charging's deployed charger base, are seen as particularly at risk due to the potential shift in market sentiment. In light of these factors, UBS has opted to lower the price target and adopt a more cautious stance on the stock.
The firm also indicated that better visibility into a sustained demand recovery could shift their perspective to a more positive outlook. Conversely, increasing cash burn and higher operating expenses could lead to a more negative stance. UBS is looking for signs that Blink Charging will meet its second-half 2025 adjusted EBITDA breakeven target as a potential indicator of the company's future performance.
In other recent news, Blink Charging Co. has formed a strategic partnership with ChargeHub to expand its electric vehicle (EV) charger access. This partnership aims to enhance the user experience by integrating Blink's public EV chargers into ChargeHub's Passport roaming hub, providing access to over a million ChargeHub users.
Blink also reported a third-quarter revenue of $25.2 million, falling short of the projected $36 million. The company's earnings per share were $(0.18), slightly better than the $(0.19) estimate from Benchmark but lower than the consensus estimate of $(0.19). Despite lower sales figures, Blink managed to improve its gross margin to 36%, up from 29% the previous year.
Benchmark maintains a Buy rating for Blink Charging, anticipating a rebound in the company's product sales. Additionally, 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.
These are among the recent developments for Blink Charging.
InvestingPro Insights
The recent downgrade of Blink Charging Co. (NASDAQ:BLNK) by UBS aligns with several key metrics and trends identified by InvestingPro. The company's financial health and market performance reflect the challenges highlighted in the analyst's report.
According to InvestingPro data, Blink Charging's revenue for the last twelve months as of Q3 2023 stood at $138.73 million, with a revenue growth of 15.13%. However, this growth is overshadowed by a significant quarterly revenue decline of -41.93% in Q3 2023, supporting UBS's concerns about slowing sales.
InvestingPro Tips reveal that Blink Charging is "quickly burning through cash" and is "not profitable over the last twelve months." These insights corroborate UBS's caution regarding the company's financial trajectory and its ability to meet future performance targets. The operating income margin of -51.57% further underscores the profitability challenges faced by the company.
The stock's recent performance also reflects market skepticism, with InvestingPro reporting a -15.92% one-week price total return and a -58.48% one-year price total return. This aligns with the UBS analyst's observation of a 17% decline following the U.S. Presidential election.
For investors seeking a more comprehensive analysis, InvestingPro offers 14 additional tips for Blink Charging, providing a deeper understanding of the company's financial health and market position.
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