Stock Story -
EV charging infrastructure provider Blink Charging (NASDAQ:BLNK) fell short of analysts' expectations in Q2 CY2024, with revenue up 1.3% year on year to $33.26 million. It made a non-GAAP loss of $0.18 per share, improving from its loss of $0.67 per share in the same quarter last year.
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Blink Charging (BLNK) Q2 CY2024 Highlights:
- Revenue: $33.26 million vs analyst estimates of $38.97 million (14.6% miss)
- EPS (non-GAAP): -$0.18 vs analyst estimates of -$0.13
- Gross Margin (GAAP): 32.2%, down from 40.2% in the same quarter last year
- EBITDA Margin: -44.2%, down from -41.1% in the same quarter last year
- Free Cash Flow was -$10.01 million compared to -$24.31 million in the previous quarter
- Market Capitalization: $271.9 million
One of the first EV charging companies to go public, Blink Charging (NASDAQ:BLNK) is a manufacturer, owner, operator, and provider of electric vehicle charging equipment and networked EV charging services.
Renewable EnergyRenewable energy companies are buoyed by the secular trend of green energy that is upending traditional power generation. Those who innovate and evolve with this dynamic market can win share while those who continue to rely on legacy technologies can see diminishing demand, which includes headwinds from increasing regulation against “dirty” energy. Additionally, these companies are at the whim of economic cycles, as interest rates can impact the willingness to invest in renewable energy projects.
Sales GrowthA company’s long-term performance can give signals about its business quality. Even a bad business can shine for one or two quarters, but a top-tier one tends to grow for years. Luckily, Blink Charging's sales grew at an incredible 120% compounded annual growth rate over the last five years. This is encouraging because it shows Blink Charging's offerings resonate with customers, a helpful starting point.
We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Blink Charging's annualized revenue growth of 110% over the last two years is below its five-year trend, but we still think the results were good and suggest demand was strong.
This quarter, Blink Charging's revenue grew 1.3% year on year to $33.26 million, falling short of Wall Street's estimates. Looking ahead, Wall Street expects sales to grow 21.5% over the next 12 months, an acceleration from this quarter.
Operating MarginOperating margin is a key measure of profitability. Think of it as net income–the bottom line–excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.
Unprofitable industrials companies require extra attention because they could get caught swimming naked if the tide goes out. It's hard to trust that Blink Charging can endure a full cycle as its high expenses have contributed to an average operating margin of negative 135% over the last five years.
On the bright side, Blink Charging's annual operating margin rose significantly over the last five years, as its sales growth gave it immense operating leverage. Still, it will take much more for the company to reach long-term profitability.
In Q2, Blink Charging generated an operating profit margin of negative 62.1%, up 59.9 percentage points year on year. This increase was solid, and since the company's gross margin actually decreased, we can assume it was recently more efficient because its operating expenses like sales, marketing, R&D, and administrative overhead grew slower than its revenue.
EPSAnalyzing long-term revenue trends tells us about a company's historical growth, but the long-term change in its earnings per share (EPS) points to the profitability of that growth–for example, a company could inflate its sales through excessive spending on advertising and promotions.
Blink Charging's earnings losses deepened over the last five years as its EPS dropped 17.4% annually. We'll keep a close eye on the company as diminishing earnings could imply changing secular trends and preferences.
In Q2, Blink Charging reported EPS at negative $0.18, up from negative $0.67 in the same quarter last year. Despite growing year on year, this print missed analysts' estimates. Over the next 12 months, Wall Street is optimistic. Analysts are projecting Blink Charging's EPS of negative $2.37 in the last year to reach break even.
Key Takeaways from Blink Charging's Q2 Results We struggled to find many strong positives in these results. Its revenue unfortunately missed and its EPS fell short of Wall Street's estimates. Overall, this was a mediocre quarter for Blink Charging. The stock traded down 7.5% to $2.34 immediately after reporting.
