Having struggled since early 2021, electric vehicle (EV) charging company Blink Charging (NASDAQ:BLNK) is popping up sharply today on some much-needed positive news. Specifically, the company’s preliminary sales results blew the doors off Wall Street’s target, setting a new company record. Now, BLNK stock is up 30%. Still, the smart money appears to be remaining cautious.
According to Barron’s, for the fourth quarter of 2023, Blink believes its sales should exceed $42 million. If so, that figure would leap past analysts’ consensus target of $34 million by 24% and represent year-over-year (YOY) growth of approximately 85%.
For the full year, Blink estimates that revenue will rise above $140 million, outpacing previous guidance for between $128 million and $133 million. Both the quarterly and full-year sales estimates represent all-time highs for the company.
Naturally, the enthusiasm for BLNK stock not only boosts sentiment for the EV infrastructure play but for the entire ecosystem. As Barron’s notes, higher interest rates have been particularly onerous for small-capitalization enterprises tied to the EV industry. “Higher rates make it harder for small companies that aren’t yet profitable to raise money,” reports Barron’s.
Along with Blink, analysts don’t expect competitors EVgo (NASDAQ:EVGO) and ChargePoint (NYSE:CHPT) to be profitable this year.
BLNK Stock Is Popping Up. Should Investors Take the Bait?
Adding to the sentiment spike for BLNK stock is a sense of brewing optimism. “We are excited about our record-breaking fourth-quarter and full-year 2023 revenue growth […] We saw strong demand for both our equipment and services,” said Blink Charging CEO Brendan Jones.
Still, the overriding concern for BLNK stock remains its long-term performance stats. In the trailing one-year period, shares have lost more than 66%. That’s a staggering figure. What’s more, over the past five years, Blink has only moved up about 19%.
Given Wednesday’s sharp sentiment spike, retail investors may be anticipating a reversal of fortune. However, the smart money doesn’t seem to feel the same. According to Barchart’s unusual options activity screener, two countervailing contracts stand out:
- BLNK Mar 15 ’24 4.00 Call, priced at 44 cents (at time of writing) with a bid-ask spread of 8.7%.
- BLNK Mar 15 ’24 4.00 Put, priced at $1.05 with a bid-ask spread of 17.14%.
Notably, the put option for the same strike price ($4) and expiration date (March 15) carries a substantially higher price premium of nearly 139%. While several factors can influence the premium discrepancy, one plausible explanation is the (much) higher demand for “insurance.”
Essentially, the smart money may not be ready to commit to the upswing and are holding onto the puts in case of a downswing.
Why It Matters
Currently, Wall Street analysts rate BLNK stock as a consensus moderate buy. This assessment breaks down as two buys, one hold and zero sells. Overall, the average price target clocks in at $12, implying over 240% upside potential.
On the date of publication, Josh Enomoto 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.
