Shares of Blink Charging Co (NYSE:BLNK) may have fallen 2.1% on Tuesday, but that shouldn’t mask the stock’s giant rally this month. Blink stock is up more than 350% in May! So is this a stock that belongs on investors’ radar or one that they should stay away from? To help answer that question, it would be nice to know what exactly Blink does.
Blink Charging Co
With a market cap of just $155 million, let’s not confuse Blink stock for a mega company like AT&T Inc. (NYSE:T) or even a “smaller” company like Advanced Micro Devices, Inc. (NASDAQ:AMD) or Skyworks Solutions Inc (NASDAQ:SWKS).
But essentially, Blink makes or provides residential and commercial vehicle charging equipment and services. As the trend for hybrid and electric vehicles continues to grow, we will need more ways to charge, right? On paper it makes sense. When it comes to execution though, it’s not so easy.
There’s a reason why shares are up almost 400% this month, but are “only” up 56% this year and are actually down more than 25% over the past 12 months.
The company’s sales are minuscule vs. its market cap: just $2.5 million as of year-end 2017. For those keeping track, it’s BLNK’s worst revenue result since 2013. Obviously with such low sales, the bottom line is not looking good.
Ultimately BLNK stock lost more than $75 million in fiscal 2017, more than the last four years combined.
In February the company issued warrants to help fund its “nationwide” expansion.
Keep in mind that Blink went from sub-$2 per share this month to now more than $7 after getting a deal with Whole Foods, now owned by Amazon.com, Inc. (NASDAQ:AMZN). While that sounds like a lot of potential, let’s remember that Blink Charging Co opened three locations, with plans to open more with new WFM locations.
That’s not worth 400% to me, but who’s keeping count?
On the balance sheet, BLNK has almost $10 million in the bank. Although it should be pointed out that, before its previous raise in February, it had just $0.18 million, yeah, $180,000, in the coffers.
Trading Blink Stock
Okay, so the fundamental picture doesn’t really stand out as an extremely bullish situation. At least from a trading perspective, BLNK stock looks a little better.
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Unfortunately though, it doesn’t look that good. It’s good to see Blink stock consolidating and holding onto some of those massive gains for the month of May. However, it’s churning just below $8, which was a massive level of support throughout 2017. Failure to push through it would cement it as a massive level of resistance in 2018.
Further, there’s a strong level of downtrend resistance in play (blue line). Along with the 200-day moving average acting as resistance, BLNK stock has a tough road ahead of it.
But if BLNK stock can push through $8 decisively, it will be able to clear all three of those major levels of resistance. That would be impressive and certainly catch the bulls’ attention, despite the not-so-great fundamental story.
Short of that type of breakout though, I’d stay away from BLNK stock.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell did not hold a position in any of the aforementioned securities.
