No Profit, No Problem
Electric vehicles have become incredibly popular in the past couple of years. And as the world switches to cleaner energy, electric vehicle makers have been rolling in dough. Shares of electric vehicle makers Tesla and NIO have gained more than 450% and 1,400% in the past 12 months, respectively. And with President Joe Biden’s plans to replace the government’s fleet with electric vehicles, it looks like the future of automobiles will be electric.
Blink Charging is a Florida based company that designs, owns, and operates their electric vehicle charging stations. The explosive demand for clean-energy stocks has sent shares of the company to the moon — the stock is up 3,000% in the past eight months. With this massive growth, Blink Charging looks to be one of the most attractive stocks in America.
But Blink Charging has never posted an annual profit, and with only $5.5 million of revenue in 2020, their revenue is modest at best. Additionally, in May, the company said its finances “raise substantial doubt about the Company’s ability to continue as a going concern within a year.” With no profit, scant revenue, and uncertainty about if they’ll go bankrupt, investors have run the stock up over 2000% in the past 12 months.
Blinks enterprise value-to-sales ratio, a metric used to tell if a stock is overvalued or undervalued, is 481. By comparison, Tesla’s enterprise value-to-sales ratio is only 26, and Tesla is considered to be at the top of the electric vehicle chain.
Investors are loving clean-energy stocks, even if the companies have questionable finances.
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.
