EV charging stocks have witnessed substantial correction in the last 12 to 18 months. The factors include cash burn, intense competition and macroeconomic headwinds. In my view, these near-term challenges present a good opportunity for exposure to quality EV charging stocks. Given the industry potential, multibagger returns are likely by 2030.
An important point to note is that there are big players like Tesla (NASDAQ:TSLA) in the EV charging industry. I am, however, focused on emerging EV charging companies with millionaire-maker potential.
Talking about the industry size in the United States, the “National Renewable Energy Laboratory estimates that by 2030 there will be 33 million EVs on the road and 28 million EV charging ports will be needed to support them.”
Further, in November 2022, McKinsey estimated that building the EV charging infrastructure in Europe “may cumulatively cost upward of €240 billion by 2030.” Clearly, the markets are still at an early growth stage. Even with heightened competition, there is ample headroom for value creation.
Let’s talk about three EV charging stocks with multibagger potential.
Blink Charging (BLNK)
In my view, the worst downside for Blink Charging (NASDAQ:BLNK) stock is over. Amidst volatility, BLNK stock has remained sideways in the last five months. A big breakout on the upside seems likely after some consolidation.
In terms of positives, there are two key points to note. First, Blink Charging has reaffirmed its guidance for achieving positive adjusted EBITDA by December 2024. Further, for 2023, Blink reported service revenue of $26.4 million, which was higher by 111% on a year-on-year basis.
As the number of installed charging stations increases, service revenue will swell. That will support EBITDA margin expansion in the next few years. Last year, the company also opened its new manufacturing facility. Enhanced vertical integration is another factor that will support margin expansion.
It’s worth noting that Blink ended 2023 with a cash buffer of $121.7 million. The current cash is sufficient to reach positive adjusted EBITDA. I don’t see any major equity dilution again. That is another factor likely to support stock upside.
Wallbox (WBX)
Wallbox (NYSE:WBX) stock is another name among EV stocks that has witnessed a deep correction. However, I see the stock bottoming out around current levels and surging higher in the coming quarters.
In my view, there are two reasons to like Wallbox. First, for Q4 2023, the company reported revenue of 43.3 million euros. On a sequential and year-on-year basis, revenue increased by 33% and 34%, respectively. I expect revenue growth to accelerate this year, driven by the introduction of new products and the acquisition of ABL.
Further, for Q4 2023, Wallbox improved adjusted EBITDA by 54% on a year-on-year basis. With continued cost-cutting efforts and operating leverage, I expect margin improvement to sustain. It’s also worth noting that with the acquisition of ABL (Germany), the company added 143 million euros of cash to its balance sheet. That provides ample flexibility for organic and acquisition-driven growth in the next 12 to 24 months.
Enphase Energy (ENPH)
Enphase Energy (NASDAQ:ENPH) stock has remained sideways in the last six months and seems to be in consolidation mode. With the stock already looking oversold, I expect a strong rally relatively soon.
As an overview, Enphase is in the business of designing and manufacturing home energy solutions for the solar photovoltaic industry. The company is high on innovation and has already shipped 73 million microinverters globally.
While Enphase is not a pure-play EV charging company, the segment growth outlook is robust. The company’s IQ EV charger is already being shipped to the U.S. and Canada from the manufacturing facility in Mexico. The charger integrates into Enphase’s solar and battery system. Additionally, the company has a bi-directional EV charger (vehicle-to-home and vehicle-to-grid) that integrates into the Enphase home energy system.
With the company having a strong global presence, expansion will likely be pursued in new geographies. It’s worth noting that Enphase reported an operating cash flow of $696.3 million last year. Robust cash flows provide ample flexibility for aggressive growth.
On the date of publication, Faisal Humayun 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.