The growth of the electric vehicle (EV) industry accelerated last year, and the market’s size is expected to grow significantly in the coming years. Governments worldwide are taking measures to promote EVs to reduce emissions given growing climate change concerns. The global EV market is expected to grow at a CAGR of 29% from 2021- 2036. Also, the EV charging station market is expected to grow by $22.02 billion from 2021 to 2025.

Several companies are now entering the EV space to capitalize on the industry’s enormous growth, but not all of them are ready to reap the benefits. In fact, many new players whose stocks have gotten pricey solely on investor optimism surrounding the industry are witnessing a pullback now.

The stocks of EV charging companies ChargePoint Holdings, Inc. (CHPT) and Blink Charging Co. (BLNK) are examples. They have lost more than 20% year-to-date but are still overvalued. We think these  two stocks may witness further downside given their weak financials. So, it’s wise to avoid them now.

Click here to checkout our Electric Vehicle Industry Report for 2021

ChargePoint Holdings, Inc. (CHPT)

In operation for more than 13 years, CHPT provides electric vehicle (EV) charging networks and charging solutions. It operates a portfolio of hardware, software, and services for commercial, fleet, and residential customers and fuels all types of vehicles, ranging from passenger vehicles to delivery vans to buses.

For its fiscal  year 2021 fourth quarter, ended January 31, 2021, CHPT’s revenue was  $42.39 million, which represents a 1.9% year-over-year decline. Its loss from operations for the quarter came in at $35.32 million. The company’s net loss was $90.75 million,  while its loss per share came in at $5.29.

Analysts expect its EPS to remain negative in fiscal 2022 and fiscal 2023. In terms of forward enterprise value/sales, CHPT’s 32.54x is 1518.9% higher than the industry average 2.01x. And in terms of forward price/sales, the stock’s 29.56x is 1782.8% higher than the industry average 1.57x. CHPT has lost 29.9% year-to-date and closed yesterday’s trading session at $21.62.

CHPT’s POWR Ratings are consistent with this bleak outlook. The stock has an overall F rating, which equates to Strong Sell in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors with each factor weighted to an optimal degree.

The stock has an F grade for Value and Growth also, and a D Grade for Stability, Sentiment, and Quality. Click here to access all CHPT’s ratings.

CHPT is ranked #86 of 90 stocks in the Industrial-Equipment industry.

Blink Charging Co. (BLNK)

Headquartered in Miami Beach, Florida, BLNK is an owner, operator and provider of electric vehicle (EV) charging equipment and networked EV charging services. The company offers both residential and commercial EV charging equipment. Its products and services include Blink EV charging network, EV charging equipment and EV related services.

The company’s revenue from its owned charging stations segment declined 51.8% year-over-year to $203,012 for the fourth quarter ended December 31, 2020. BLNK’s loss from operations was  $7.86 million for the quarter. Its  net loss came in at $7.94 million, while its net loss per share was  $0.24.

Its EPS is expected to remain negative in fiscal 2021 and fiscal 2022. In terms of forward enterprise value/sales, BLNK’s 122.68x is 7074.2% higher than the industry average 1.71x. In terms of forward price/sales, the stock’s 124.52x is 9055.8% higher than the industry average  1.36x. The stock has lost 21.1% so far this year to close yesterday’s trading session at $33.75.

BLNK’s poor prospects are apparent in its POWR Ratings also. The stock has an overall F rating, which equates to Strong Sell in our proprietary rating system. It also has a F grade for Stability, Sentiment, Value, and Quality. Click here to see BLNK’s ratings for Momentum and Growth.

BLNK is ranked #89 in the same industry.

Click here to checkout our Electric Vehicle Industry Report for 2021

CHPT shares were trading at $20.01 per share on Tuesday afternoon, down $1.61 (-7.45%). Year-to-date, CHPT has declined -50.07%, versus a 10.54% rise in the benchmark S&P 500 index during the same period.

About the Author: Ananyo Guha Niyogi

Ananyo’s ardent interest in capital markets, wealth management, and financial regulatory issues, led him to a career as an investment analyst. His goal is to educate individual investors by making complex financial issues easy to understand. More...

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