Electric vehicle (EV) charging stocks such as Blink (BLNK) and Nuvve (NVVE) should be on the radar of investors who are bullish on the EV market. The shift towards clean energy solutions will accelerate the demand for EV vehicles, increasing the requirement for charging stations at an exponential rate.
In the last year, the stock prices of EV manufacturers, as well as charging companies, have gained significant momentum. While shares of Tesla (TSLA) and NIO (NIO) have gained 228% and 528% respectively, the stock price of Blink Charging is up a monstrous 1,400% since the end of June 2020. Nuvve on the other hand became publicly listed via a SPAC in late 2020 and has gained over 35% in this period. Let’s see which of these two EV charging stocks is a better buy right now.
Blink Charging is valued at a premium
Blink Charging is a pure-play EV charging company. It operates, owns, designs, and manufactures charging equipment while providing EV-related services for residential and commercial customers. Blink Charging has deployed more than 23,000 charging stations all over the world and enjoys a 10% market share in the U.S.
These charging stations are based on a revenue-sharing model which means Blink has to monetize energy sales and recover installing costs, which will result in higher charging prices compared to peers.
In Q4 of 2020, Blink’s product sales rose by 227% year over year to $1.8 million, allowing the company to end the year with $6.23 million in sales. Blink’s sales more than doubled from $2.76 million in 2019. Wall Street expects the company to increase sales by 99% to $12.4 million in 2021 and by 98% to $24.56 million in 2022.
Blink Charging has a capital-intensive business and continues to raise money via equity offerings thereby diluting existing shareholder wealth. The stock is also valued at a market cap of $1.74 billion indicating a price to 2022 sales multiple of 71x which is extremely steep.
Nuvve Corp is valued at a market cap of $245 million
Nuvve develops V2G or vehicle-to-grid software technology. Its Grid Integrated Vehicle Platform, also known as GIVe, transforms EVs into grid assets while they are charging. Nuvve leverages EVs to store and resell energy to the electric grid and uses its cloud-connected application to calculate a vehicle’s remaining capacity available to sell to the grid while ensuring that each vehicle has enough charge to complete its next trip.
Nuvve serves businesses as well as homes while reducing the cost of electric infrastructure through its programs of workplace charging, campus fleet vehicle charging, commercial delivery fleet charging, and multi-unit dwelling car sharing and charging.
Nuvve enjoys a leadership position in the V2G space which is estimated to touch $17 billion by 2027. Comparatively, Nuvve is forecast to increase sales from $6 million in 2020 to $32 million in 2021 and $93 million in 2022. We can see that Nuvve stock is trading at a forward price to 2022 sales multiple of just 2.63x which is very reasonable given its staggering estimated growth.
The verdict
We can see both the companies discussed here are expected to improve their top-line growth at a stellar pace. However, based on valuation, Nuvve is easily the better pick. Further, it will also benefit from a first-mover advantage and its patent ownership will make it difficult for competitors to replicate Nuvve’s success.
BLNK shares were trading at $42.09 per share on Friday morning, up $0.59 (+1.42%). Year-to-date, BLNK has declined -1.54%, versus a 14.71% 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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