Nuvve Holdings (NVVE) and Blink Charging (BLNK) are two U.S.-based electric vehicle (EV) charging companies. Both stocks have underperformed the broader markets in 2021, along with their EV peers.
While Nuvve stock is down 55% from its record highs, Blink Charging stock has lost 43% in the last few months.
We think the price retreat offers investors an enticing buying opportunity, especially for investors that are looking to add EV stocks to their portfolio. So, here we compare the two companies and analyze which is a better buy today.
Click here to checkout our Electric Vehicle Industry Report for 2021
Nuvve offers a unique proposition
Nuvve Holdings develops V2G (vehicle-to-grid) technology. Its grid integrated platform transforms EVs into grid assets when they are charging and uses them to store and resell energy to the electric grid.
V2G is a cloud-connected application that ensures each vehicle has adequate charging for its next trip before calculating the remaining capacity available to sell to electric grids. Nuvve serves public organizations, businesses, and homes while reducing the cost of electric infrastructure and carbon emissions through its partnership programs--workplace charging, campus fleet vehicle charging, commercial delivery fleet charging, and multi-unit dwelling car sharing and charging.
Nuvve is one of the leaders in the V2G market, which is projected to expand to $17 billion by 2027. The company is poised to increase its top-line over the coming decade and expects sales to rise fivefold to $32 million in 2021 and to $93 million in 2022. Given its enviable growth expectations, Nuvve is trading at a more than reasonable 6.3x forward price to sales multiple considering its $201 million market cap .
Blink Charging is trading at a lofty valuation
BLNK owns and operates EV charging equipment and networked EV charging services in the U.S. It offers residential and commercial EV charging equipment that enables drivers to recharge at various locations.
The company also provides a cloud-based system that operates, maintains, and tracks multiple Blink charging stations in addition to associated charging data, back-end operations, and payment processing. It provides property owners, managers, parking companies, and municipal entities with cloud-based services that allow them to monitor and manage EV charging stations remotely.
Further, Blink also provides EV charging hardware, software services, and service plans. It has grown via strategic partnerships with airports, auto dealers, hotels, multifamily residences, parking lots, restaurants, and other workplace locations. At the close of 2020, the number of EV charging stations deployed by Blink stood at 16,617 in the U.S., representing 10% of the total market.
Blink’s charging stations are set up based on a revenue-sharing business model. This means Blink must monetize energy sales in order to recover installation costs. This model increases charging costs for customers making them less attractive when compared to its peers.
In the quarter that ended December 31, Blink managed to increase its product sales by 227% to $1.8 million on a sequential basis. Its sales more than doubled to $6.2 million in 2020 compared to just $2.75 million in 2019.
Analysts tracking the firm expect Blink Charging revenue to rise to $11.28 million in 2021 and to $22.17 million in 2022. Given its $1.45 billion market cap , Blink Charging stock is trading at a 128.6x forward price to sales multiple, which is mind boggling.
The final takeaway
Blink charging remains unprofitable and continues to report negative cash flows. At the close of 2020, the company’s cash in hand stood at just $22.3 million, which suggests Blink will have to raise significant capital because building charging stations is a capital-intensive undertaking. So, we think investors should brace for a dilution of shareholder wealth.
Alternatively, Nuvve’s proprietary technology, patent portfolio, and leadership position in the V2G segment, coupled with its relatively lower valuation, make it one of the top stocks to buy and hold over the long term.
Click here to checkout our Electric Vehicle Industry Report for 2021
NVVE shares fell $0.17 (-1.70%) in after-hours trading Wednesday. Year-to-date, NVVE has declined -42.04%, versus a 11.56% rise in the benchmark S&P 500 index during the same period.
About the Author: Aditya Raghunath
Aditya Raghunath is a financial journalist who writes about business, public equities, and personal finance. His work has been published on several digital platforms in the U.S. and Canada, including The Motley Fool, Finscreener, and Market Realist.
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