Shares initially came in around $9 but have quickly settled right at the $10.00 SPAC offering price. Thus, the initial market reaction to WallBox has been pretty ambivalent. That’s quite understandable, given how terribly the SPAC sector has traded in recent months.
However, investors should give WBX stock a second look before writing it off as just another EV SPAC. WallBox has some things going for it that could make it a better play than many of its EV stock peers.
The SPAC Merger & WBX Stock
Kensington Capital Acquisition Corp. II recently merged with WallBox in a deal that valued the company at $1.5 billion. This was a speedy transaction. Kensington announced the purchase in June, and here it has already closed in October.
You may recall the Kensington Capital name from somewhere. This is, after all, the second Kensington Capital SPAC. The first turned into QuantumScape (NASDAQ:QS).
That’s a mixed blessing for WallBox shareholders. Admittedly, QuantumScape has been dogged by controversy and is one of 2021’s bigger disappointments. On the other hand, QS stock ran up from $10 to $100 before subsequently crashing. That’s one of the more impressive SPAC debuts of recent memory, and makes traders wonder if WallBox will enjoy similar interest.
What Is Wallbox?
WallBox was founded in 2015. It aims to build the leading smart charging platform. Specifically, WBX stock units management communication and interactions between the user, vehicle, electric grid, building, and the charger.
WallBox believes that charging equipment is a key component of driving global EV adoption. It styles itself as an infrastructure play that will pave the way for mass-scale EV ownership.
The company has a variety of products already available. Among the highlights, one is its bidirectional charger. This allows users to charge their vehicles like normal, but also to send power from the car battery back to power their home or business if needed. Two-directional charging, if adopted broadly, could help solve a lot of problems inherent to grid stability and renewable power generation. WallBox also has its ElectroMaps software for finding and managing all public charging stations, creating a sort of charging station database.
Already A Functioning Business
Unlike so many SPACs and EV-related companies, WallBox is already an operating business. The company projects selling 119,000 units for full-year 2021. This should rise to 232,000 next year, and 383,000 in 2023.
For 2021, WallBox anticipates bringing in $79 million of revenue. That’s not a huge number, but it’s significant enough to prove significant market demand. WallBox anticipates reaching half a billion revenue run-rate in early 2024, and it is looking at reaching a positive EBITDA threshold at that point as well.
However, WallBox needs to grow more. Namely, it is building a factory in Texas to augment its production facilities. Right now, WallBox produces its goods in Spain and China. However, given supply chain issues, it makes sense to diversify its factories, particularly since WallBox intends to be a global leader in EV charging. Proceeds from the recent SPAC deal will help WallBox with its capital needs in building out this global footprint.
WBX Stock Verdict
WallBox is still a few years away from profitability. It has numerous steps to take along that path, such as setting up its manufacturing facilities in the United States. There are ways that the thesis could run off the rails.
That said, I’d much rather invest in a picks and shovels EV company like this than some all-or-nothing play like QuantumScape. WallBox is already selling tens of millions of dollars of chargers every year and growing quickly. As long as management continues to execute on its business plan, WBX stock holders should do well.
On the date of publication, Ian Bezek did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Ian Bezek has written more than 1,000 articles for InvestorPlace.com and Seeking Alpha. He also worked as a Junior Analyst for Kerrisdale Capital, a $300 million New York City-based hedge fund. You can reach him on Twitter at @irbezek.