EV charging stocks are absolutely taking off today. Despite bearish sentiment in the overall market, investors have found one pocket to be bullish on. This afternoon, shares of ChargePoint (NYSE:CHPT), Blink Charging (NASDAQ:BLNK) and Volta (NYSE:VLTA) are all up by around 10%.
New analyst coverage for the sector is one of the big drivers behind this movement. Specifically, Christopher Souther of B. Riley initiated coverage on the space with a note on CHPT stock. The analyst sees ChargePoint as a potential $20 stock over the next year. This implies upside of “more than 40%.”
Earlier this week, news that Blink will be expanding its charging network via an acquisition also excited investors. The company will reportedly pay $200 million to acquire SemaConnect, a competitor in the EV charging space. This move has led to speculation about more industry consolidation, which would boost the valuations of existing players in theory.
So, are EV charging stocks a buy? Let’s dive in.
Is Now the Time to Buy EV Charging Stocks?
Right now, analysts seem to be growing bullish on this sector. Souther’s coverage on CHPT stock is among a number of positive outlooks shared by Wall Street — and for understandable reasons.
Level 2 charging demand among both commercial and residential customers carries impressive upside potential. If names like ChargePoint are able to increase their margins over time, the economies-of-scale argument for major players becomes increasingly attractive.
That argument is also bolstered by continued industry consolidation. In particular, the new Blink deal could signal the start of a rush to acquisitions by larger players. Valuations have come down, making M&A activity more attractive right now.
Personally, I think things are finally starting to look up for this sector. Of course, more downside could materialize in the near term. But a bullish thesis is starting to form in the markets. That could give EV charging stocks room to run from here.
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On the date of publication, Chris MacDonald did not hold (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.
