Blink Charging Co.

Blink Charging Co. (NASDAQ: BLNK), formerly Car Charging Group, Inc., is an owner, operator and provider of electric vehicle (EV) charging equipment and networked EV charging services. The Company offers residential and commercial EV charging equipment, enabling EV drivers to recharge at various location types. 

Key highlights

• A leader in EV Charging: The Company has a growing registered member base of over 180,000+ and has deployed more than 23,000+ EV charging stations throughout the US, Europe, and the Middle East. The company’s connected charging stations attract drivers by supporting plug-in EV’s, and its products boast the highest rated power output for a Level 2 charging station. The company is in a strong position to capitalize on the steady global trend promoting EVs over traditional gasoline-powered vehicles. 

• Plenty of opportunities: The accelerating adoption of electric vehicles represents an enormous opportunity for EV infrastructure providers. There are currently 1 million electric vehicles in the U.S., and the global EV market is expected to grow at a 31% CAGR from 2020 – 2030. OEMs have committed USD 300 billion to EV engineering, production, and support to bring 400 BEV and PHEV (plug-in hybrid electric vehicle) models to market by 2025.

Source: Company 

• Received order for 50 charging stations from InterEnergy Group: On February 4th, 2021, the company announced that it had received an initial order for 50 charging stations from InterEnergy Group to expand the Evergo network into Panama. The 35 Blink IQ 200 Level 2 AC EV charging stations would serve all regional electric standards and are expected to be deployed in Panama along with 15 Blink distributed DC Fast chargers. The project is expected to see nearly 200 new EV charging stations in Panama operating on InterEnergy’s Evergo network by the end of the year. 

Financial overview of Q3 2020 (Amount in USD)

Source: Company 

• In Q3 2020, total revenue registered by the company was USD 905,460, increased by 18%, compared to USD 764,486 during the previous corresponding period.
• Cost of sales improved slightly to USD 538,825 in Q3 2020, against USD 643,239 in pcp.
• On the back of higher revenue recognition and controlled cost of sales, the company registered growth in gross profit, which stood at USD 366,635, against USD 121,247 in pcp.
• The company reported a net loss of USD 3.9 million in the reported quarter, against a loss of 2.6 million in pcp. The rise in net loss was mainly due to higher operating expenses. 

Risk associated with investment

The global spread of the novel coronavirus (Covid-19) has created significant volatility, uncertainty and economic disruption. There are many other factors which could impact the operations and financials of the company such as customers’ ability to pay for the company’s EV charging equipment and related service, high completion, the impact of business disruption would lead to negative impact on demand for the company’s EV charging equipment and related services, etc. 

Stock recommendation

The accelerating adoption of electric vehicles represents an enormous opportunity for the Company. They are also growing their registered member base of over 180,000+ and has deployed more than 23,000+ EV charging stations throughout the U.S., Europe, and the Middle East. The sector, in which the Company operates is having a golden future as global EV market is expected to grow at a 31% CAGR from 2020 – 2030, which would generate plenty of opportunity for them. In Q3 2020, total revenue increased by 18% to USD 0.9 million compared to Q3 2019 despite business interruptions due to the COVID-19 pandemic and product sales in Q3 2020 grew 74% to USD 0.6 million as compared to the previous corresponding quarter, related primarily to increased demand for the Company's commercial and residential products. The stock has generated a return of 475% in last three months and 21.5% in last one month. On the valuations front, the stock is trading at a forward EV to Sales multiple of 190x, which is gigantically higher compared to the industry average of 9.3x. Since the Company is trading on a very high NTM EV/ Sales multiple against the industry, we recommend an "Expensive" rating at the closing price of USD 53.35 on February 5, 2021.

Source: Refinitiv (Thomson Reuters)

Gevo, Inc.

Gevo, Inc. (NASDAQ: GEVO) is a growth-oriented renewable fuels company that is focused on commercializing the next generation of renewable low-carbon liquid transportation fuels.

Key Updates:

• On January 19, 2021, the company entered into a Securities Purchase Agreement with institutions and accredited investors for the sale of 43,750,000 common shares, at a price consideration of USD 321.7 million. The above fund would be utilized to fund capital projects, working capital and for general corporate purposes.
• Earlier, on January 11, 2021, the company announces the concept of Net-Zero Projects for the production of energy dense liquid hydrocarbons using renewable energy and the company’s proprietary technology.

Q3FY20 Financial Highlights:

• GEVO announced its quarterly result, wherein the group posted total revenues of USD 0.192 million, as compared to USD 6.110 million in the previous corresponding period (pcp). The decline was primarily attributable to a significantly lower income from Ethanol and related products (USD 0.021 million versus USD 5.554 million in Q3FY19).
• Gross loss remained lower at USD 2.068 million, from USD 3.783 million in Q3FY19, primarily attributable to considerably lower costs of goods sold of USD 2.260 million versus USD 9.893 million in pcp.
• Total operating expenses stood at USD 4.035 million, lower than USD 4.22 million in pcp. Loss from operations stood at USD 6.103 million versus USD 8.003 million in pcp.
• The company reported a net loss of USD 6.836 million, declined from USD 8.619 million in Q3FY19.
• The group posted cash and cash equivalents of USD 80.621 million, while total assets were recorded at USD 153.487 million.

Q3FY20 Income Statement Highlights (Source: Company Reports)

Risks: The company is yet to report a stable income and cash flows, which is a key concern. Moreover, the company expects to incur future net losses as it continues to fund the development and commercialization of its product candidates. 

Stock Recommendation:

The group’s net zero project has a capacity of 45MGPY of hydrocarbons which can produce more than 350,000,000 pounds per year of high protein feed products for use in the food chain, to produce enough renewable natural gas to be self-sufficient for the production process needs, and also to generate renewable electricity with a combined heat and power system. The company seek to produce enough renewable natural gas to be self-sufficient for the production process needs, and also to generate renewable electricity. However, GEVO is financing its operations primarily with proceeds from the issuance of equity and debt securities, borrowings under debt facilities and product sales, as it is yet to report a stable income source. The group is yet to report any successful development and commercialization of its product, and hence we prefer to remain on the sidelines. Moreover, the stock soared ~979% and ~1886% in the last three months and six months, respectively, due to the recently announced projects plans. Hence considering the aforesaid facts, we recommend an ‘Expensive’ rating on the stock at the current closing price of USD 11.55 on February 05, 2021.

GEVO Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

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