Blink Charging (NASAQ:BLNK) and ChargePoint (that will IPO through reverse merger with Switchback Energy, which has a SBE ticker for now) are two EV infrastructure companies.
They are mainly involved in the manufacturing, setting up, and operation of EV charging sites in North America and Europe. With a rise in climate awareness and a growing shift from gas vehicles to electric vehicles happening around the globe, EV infrastructure is a sector hard to overlook.
But which stock, BLNK or SBE, is a better buy going into 2021?
Blink Charging was founded in 2009 with the vision to help our transition to sustainable transport. The Miami-headquartered company has deployed over 23000 charging stations since its inception and also operates a cloud-based system allowing drivers/customers to easily find stations and book charging slots. As of 2020, Blink has over 15000 charging stations. The company went public in 2018 and raised $18.25 million via an IPO. The company currently has a market cap of $331 million.
ChargePoint is a California-headquartered EV infrastructure company founded in 2007. ChargePoint is currently the largest independent EV charging infrastructure operator in the world with 150000 charging sites across 14 countries. ChargePoint too has its own cloud-based system allowing customers to find and book any of their stations. In a few months time, ChargePoint will merge with Switchback Energy, a SPAC(Special Purpose Acquisition Company) focused on renewable energy. The deal will give ChargePoint $683 million in proceeds to advance its business.
Blink Charging develops its own charging system and deploys them via different ownership structures. All charging systems are connected to the Blink network. Blink offers four different ownership structures, namely, Host Owned, Hybrid Owned, Blink Owned, and Blink as a Service. Under Host Owned, the host covers all expenses and receives all revenues.
Under Hybrid Owned, Blink pays all expenses except installation and gets a cut of the revenues. Under Blink Owned, Blink bears all costs and receives all revenues. Under Blink as a Service, Blink pays for equipment and maintenance while the host pays for electricity and installation under a revenue share model.
BLNK has attracted lots of commercial host customers as a charging station makes the host location a point-of-interest for EV owners and gives the host a chance to sell other services to customers while they wait for their car to charge.
Like Blink, ChargePoint too operates on a host and ChargePoint-owned business model that is both capital-light and high-margin. The company provides complete turn-key solutions to hosts. ChargePoint also generates recurring revenue from hosts for its cloud platform SaaS. As a first-mover in the space, ChargePoint has a far bigger footprint.
Financial Performance and Valuation
In Q3, Blink reported revenue of $900000, up 18% YoY, and product sales grew 74% QoQ to $0.6 million. Total revenues for the first three quarters of the year were $3.8 million, up 84% YoY. The company reported an 87% increase in wholly-owned locations. Net loss for the quarter was $3.9 million and cash on hand is $14.9 million.
Since ChargePoint has just completed its SPAC deal, it is yet to declare any financial results. However, the company stated that it expects hockey-stick growth in revenues.
It expects revenues to grow from $135 million in 2020 to $2.069 billion by 2026, implying a 57% compounded growth rate. The company is currently trading at a revenue multiple of a little over 9x. ChargePoint has a 51% upfront and 49% recurring revenue ratio.
In North America, they have a 73% market share, more than 7x its closest competitor(Blink). The company has given revenue guidance of $198 million and $346 million for FY21 and FY22.
While both companies are poised to grow exponentially on the back of massive growth in EV sales, ChargePoint/SBE stock is a safer investment at this point in time. Also, it is definitely a stronger company with far more market share.