Two Green Energy Plays Poised For Gains In 2023

Key Points

• The Inflation Reduction Act is facing opposition, but these stocks don't need it to succeed. 
• Blink Charging is expanding its operations to meet demand. 
• Plug Power reaffirms long-term targets and market dominance. 

Green energy stocks like Plug Power (NASDAQ: PLUG) and Blink Charging (NASDAQ: BLNK) are struggling with near-term headwinds now, but they are also getting into position for big gains in 2023. While focused on different aspects of the green energy industry, both are building out in-demand services that are expected to or are currently dominating their respective fields. The recent passage of the Inflation Reduction Act may help these plans but is not central to their success, which is good news. There is growing opposition to the IRA in international arenas, and it (or portions of it) could easily get tossed out. The EU and South Korea stand together in pointing out nine major breaches of international law, so there is good reason to believe they’ll win any legal fights. The takeaway is that Blink Charging, and Plug Power are making headway now, regardless of any benefit the IRA may bring, and that won’t change in 2023. 

Blink Charging Pulls Back On Mixed Results 

Blink Charging shocked the market with mixed results but let's be fair. The company is small enough that $1 million in revenue is a big difference, and it is growing at a wicked hot pace. The only thing mixed about the results, from the investment perspective, is that revenue of $17.25 million beat and the EPS of -$0.47 missed. The salient points are that revenue grew by 170% YOY, beat the consensus estimates by 1000 basis points, and the miss on earnings is due in large part to non-cash impairments and other charges unrelated to the underlying business. The company’s gross profit increased by 436% which is another notable metric, and margins improved at all levels. 

Turning to the guidance, Blink Charging does not give specific guidance but does issue favorable internal metrics and outlook for production. Internally, revenue growth was driven by a 177% increase in core product sales and offset by a slightly slower 160% growth in serves, and production is ramping to meet this demand. The company is expanding its current facility and building a new one that should bring total production up to 50,000 units per year from the current 10,000 by 2024 and reach a total of 100,000 soon after. As far as the analysts go, there are nine analysts with current ratings, and they have the stock pegged at a firm Hold with a price target more than 130% above the recent action. Even the newly set low price target of $14 is offering a double-digit upside. 

Plug Power Steadies On Weak Results 

Plug Power delivered a much-weaker-than-expected Q3 report but is offset by some mitigating factors, including the timing of completed projects and reaffirmed long-term production targets. The company reported $188.6 million in revenue and missed the Marketbeat.com consensus estimate by over 2000 basis points, but it still produced a strong 31% of growth. The bad news, really, is that GAAP EPS missed by almost the same margin but the fact margins offset even this did not contract as much as expected. 

The good news is the outlook for production. The company lowered its guidance for 2022 due to headwinds but reaffirmed not only the long-term 2026 and 2030 targets but the target for 2023 as well. The company’s expansions hit some snags in 3 US States but are on track in all other arenas and gaining momentum in the EU, and the analysts are on board. There have been some price target reductions in the wake of the report, but the consensus of 21 analysts is still a Moderate Buy with a price target 100% above the recent price action.