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Tech Stocks

ChargePoint Holdings Stock Review

After an explosive run to end 2020, ChargePoint Holdings (NYSE: CHPT) has given back over 50% of its value gained last year. ChargePoint Holdings stock reached all-time highs of nearly $50 per share in December 2020. However the company had a slower year in 2021. Can CHPT stock turn it around in the final quarter of the year?

The California-based electric vehicle infrastructure company went public with SPAC Switchback Energy. The merger brought ChargePoint to the market as the first publicly traded EV charging company.

ChargePoint Holdings stock advanced when President Biden announced his plans to speed up the clean energy sector. Specifically, the President’s plan focuses on a $15 billion investment to stimulate the creation of an EV charging network. According to the plan, companies will place the EV chargers in public areas such as apartments and parking lots. They will also be placed throughout the community.

With the clear transition to electric energy underway, will CHPT stock make the most of the opportunity? Keep reading to find out.

chargepoint holdings stock

Analyzing ChargePoint Holdings Q2 Financial Results

Although many analysts see ChargePoint’s second quarter as a “miss,” it was still a constructive period for the growing company. The EV charging provider grew in several important business aspects. They also raised their expectations for the rest of the year.

  • Revenue grew to $56.1 million in Q2. Representing growth of 61% from the previous year. A key area of development was in the charging network. The segment is nearly doubling in revenue from $21.4 to $40.9 million in one year. The company noted higher demand across North America and Europe as more individuals convert to EVs.
  • Active charging ports increased by around 6,000 for the quarter to roughly 118,000. In Europe, the company is aggressively growing as charging ports grew to 5,400. This is an improvement from 4,700 in Q1.
  • The ViriCiti acquisition gives ChargePoint Holdings chargers more functionality. The new technology enables features like battery health monitoring and maintenance support.
  • Residential billings increased by 80% for the year. This category includes single-family homes and apartment buildings. It can also include employees that charge vehicles at home.
  • The Mercedes Benz Partnership will combine the companies resources to build a new charging network. The Mercedes me Charge vehicle network will span North America, serving the Mercedes EV fleet.

Overall, it was a solid quarter for ChargePoint Holdings stock and its shareholders. Due to supply chain issues, the company was unable to keep up with an increase in demand. Rex Jackson, CFO, noted higher logistics costs and part shortages as reasons.

Despite the minor issues, ChargePoint Holdings raised revenue expectations for 2021. The company is increasing its revenue target from $195 – $205 million to $225 – $235 million.

Why Has ChargePoint Holdings Stock Lost Value?

Following ChargePoint’s earnings release on September 1st, CHPT stock opened higher. But the stock slipped throughout the week to just under $21 per share. Since ChargePoint is growing in many aspects, how come CHPT share price is down over 40% this year?

1)    Valuation

Although ChargePoint Holdings stock is down on the year. It’s still up over 100% since the company went public via SPAC. The company has seen a value increase relative to the country’s new climate initiatives. Yet ChargePoint wasn’t the only EV name that saw a significant rise in value.

Other electric vehicle companies such as Tesla (NASDAQ: TSLA) and Blink Charging (NASDAQ: BLNK) increased in value. The drop in value is likely due to investors taking profits on overvalued assets. It can also be due to general market weakness.

2)    Infrastructure Deal

Another possible reason ChargePoint Holdings stock has recently lost value is because of the details of the infrastructure deal. The most recent proposal includes $7.5 billion in funds for the EV charging stations, half of what was initially offered.

Even though it’s still a significant number, investors had higher hopes on the deal. You could also view the loss of value as a “sell the news” event as the bill is being passed to the senate.

CHPT Stock Forecast – What Investors Can Expect Next

There’s a lot of exciting developments for CHPT stock investors to look forward to. First, the gradual transition to EVs should help ChargePoint’s value. The President’s new target of 50% electric vehicle sale share by 2030 can help to speed up the growth. In addition, several other counties have released their commitment to carbon neutrality.

As more EV manufacturers make the push for electric vehicles, it will create a bigger market for charging stations. Suppose ChargePoint Holdings can continue expanding its network as the demand for EVs increases. In that case, the company should capture a fair share of the EV charging network.

ChargePoint’s stock price is currently down on the year. This can present a buying opportunity for investors looking to get ahead of the EV movement. Right now, the average price target for CHPT stock is $34.45. CHPTs stock price today is $21.48, offering over 45% upside.

But ChargePoint’s success lies in its ability to withstand the competition and continue growing in the EV industry. If ChargePoint Holdings fails to deliver on its targets, investors could see more of a pullback.

Keep in mind also CHPT stock was formed through a SPAC, which generally comes with a risk of its own. Nonetheless, ChargePoint has a big opportunity ahead of it in a growing industry.

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About

Pete Johnson is an experienced financial writer and content creator who specializes in equity research and derivatives. He has over ten years of personal investing experience. Digging through 10-K forms and finding hidden gems is his favorite pastime. When Pete isn’t researching stocks or writing, you can find him enjoying the outdoors or working up a sweat exercising.

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