Blnk Stock – I’ve written about Blink’s (NASDAQ: BLNK ) charge several times at Search of Alpha, including the first article earlier in the day of coverage. Since then the company has risen and fallen as politics, spending and other things have gone on.
Now, as overall macroeconomic factors, partial weakening and operational spending take center stage, the company’s stock is down about 70% from those highs, though its long-term outlook is little changed.
They negotiate new contracts to establish broadcast stations and ultimately work to overspend email and compensate executives and acquisitions.
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As such, I think it’s time to double down and see the company’s stock easily reach $2,500 per share in the next few years. Let’s dive in.
If you want to read about the basics of how the company does business and where it makes and spends money, you can read my original summary here.
Over the past few years, the company has seen a steady flow of contracts and equipment orders. The company generates income from a) selling cars that run electric stations, b) charging for the sale of electricity at its own stations and c) providing contracts to maintain the existing infrastructure.
In recent news, the company has received a contract to provide electric vehicle charging stations to the federal government through the Services Administration (GSA), which will allow the federal government to purchase electric vehicle charging stations for the vehicle market. fast growing electricity.
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The financial details of this deal have not been disclosed, but we can look at the entire electric power market to make informed guesses;
In 2022, electric vehicle charging station market revenue will reach $4 billion, while the total electric vehicle market revenue will be approximately $61.2 billion. We can extract the market for power stations with emission rates of around 6.5% of the total cost. Although this will certainly decrease in the coming years, as the demand for electric vehicles is predicted to exceed the infrastructure required for easy maintenance, an estimate of 6% can be used.
In his 2023 budget, President Joe Biden requested $757 million for GSA’s electric vehicle efforts to electrify fleets and build infrastructure, while the department requested $650 million. The agency is projected to provide an average of $700 million, which means $42 million is spent annually on this infrastructure.
Although GSA is working with multiple companies, I believe this potentially adds $20 million in annual revenue that is not currently included in revenue calculations for 2023 and beyond.
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In other product news, the company also received an IDIQ contract from the US Postal Service to sell up to 14,500 charging stations for its growing electric vehicle fleet. Since the company sells the Series 7 dual-port charger for about $5,200 at retail, the median selling price of $4,000 is as good as any price the US carrier wants to buy.
If the company completes all gas station sales, it will realize approximately $58 million in net sales of 14,500 stations, which may occur over the next 2 to 3 years, estimated at $20 million per year.
Some of these may already be priced into the company’s sales projections, but based on recent reviews, I’m not sure if that’s the case, and I expect the company to expand its projections on the these factors are easy.
2023 2024 2025 2026 2027 Sales $103.4M $154.9M $207.9M $272.9M $389.6M Growth +69.05% +49.86% +34.21% +31.29% +42.
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Although the company’s growth looks good and its market share gains are in line with overall industry growth, the company’s earnings trends have not picked up after the new deal announcements, based here on the hunter search alpha returns Review.
That said, I believe that these estimates do not include most of the approximately $40 million per year that the company is expected to collect from the two contracts mentioned.
Revenue isn’t the only thing growing at Blink. The company seems to have gotten the news about profit and margins and has done some weight reduction work in recent quarters due to recent acquisitions and more acquisitions.
To begin with, the company has made good progress in raising the price of its products and reducing the cost of generating revenue, including fighting product and manufacturing cost inflation and integrating cheap products and materials that work in the same way. good
Blink Charging Co. 2022 Q1
Over the past 4 years, the company has reported gross margins of 17.9%, 30.6%, 21.1% and 29.3%. Despite continued inflation, the company managed to increase its gross profit, reporting a margin of ~33% in the last two quarters.
I believe that the company can continue to use a combination of increases in volume and reductions in raw material costs to achieve a gross profit of 35% over the longer term, thereby paving the way for significant profits.
The company has continued to integrate acquisitions and reduce overhead costs and has worked on savings and other expenses much higher than in the past. Since the company’s income is growing faster than its expenses, I see some positive long-term factors here.
1. Stock-based compensation is on a downward trend following acquisitions and executive package enhancements, from $19 million to $16 million between 2021 and 2022, which is expected to drop significantly next year.
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2. SG&A (Selling, General and Administrative) cost growth has slowed in the last two reports to around 60% year on year. This helps to write a profitable company.
One of the reasons why the company’s shares were flat was that the company bought 8.33 million shares from February this year to cover the cost of operations. It is expected to bring in about $95 million, but has contributed to dilution and fears of further dilution, as underwriters still have a large amount of stock they can sell.
That said, looking at the company’s analyst EPS estimates, I believe they are not considering the company’s potential given my aforementioned revenue performance and the continued margin growth expected in the coming years. Here are the predictions:
2023 2024 2025 2026 2027 EPS $(1.88) $(1.43) $(1.04) $(0.57) $0.18 Growth +3.68% +24.1% +27.4% +45.5% N/A Click to enlarge
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These are the main operating costs, given that we have already decided that the long-term average target is going to be a gross margin of 35%, and there are various other costs such as taxes and so on.
If we look at the growth rate of operating costs, we can arrive at what the line is looking at. From there the picture is mixed;
2018 2019 2020 2021 2022 Loss $12.8M $10.9M $19.7M $59M $103M Growth R +51% -15% +81% +200% +75% Click to enlarge
However, if you break this down into quarters, the company has managed to bring that number down to around 50%, and it is common for service providers to exceed the cap at some level . I think it’s about 115 million.
Blink Charging Company (blnk Q) Quote
This is largely due to the increased costs associated with acquisitions and building maintenance costs and staff training, which are now commonplace and do not require a large 50-75% increase in labor costs. Furthermore, the reduction of certain expenses arising from the integration of acquired companies is also likely to contribute positively to these operating cost limits.
Therefore, the following can be extrapolated to the company’s expectations:
A 98) $(0.59) $(0.16) $0.79 Click to enlarge
(EPS figures are based on 52 million shares outstanding, slightly higher than the current 51.2 million.
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The math here is quite simple – the company’s earnings will grow by around 30-40% around 2026/2027, which means, in my opinion, that we will pass for a price of 32x earnings.
That’s a fair value of more than $2,500 per share around 2027. While it’s worth noting that actual earnings estimates and results will likely vary, I think this is a reasonable average value.
This means that the company’s current trading price of $7.50 per share is overvalued, and the “yield” of about $2,500 per share on an annualized basis represents about 26% of annual revenue. I believe this will easily shake up the overall market and other EV players where the growth is almost already priced in.
I am very bullish on Blink’s long-term expectations and will (almost) double the long-term investment. I’m thinking of taking something off the table for about $2500 a part and renovating again when we get there.
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I invest, deliver and write about it as part of my income growth plan
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