ChargePoint Holdings Inc Raises Fiscal 2022 Guidance on Q2 Beat
ChargePoint Holdings Inc (NYSE:CHPT) is an overlooked electric vehicle (EV) stock that Wall Street is bullish on, even though ChargePoint stock already advanced 106% year-over-year.
Of the analysts providing a 12-month share-price forecast for CHPT stock, their average target is $34.38, with a high estimate of $46.00. At its current share price, this represents potential upside of 61% and 115%, respectively.
These gains wouldn’t even put ChargePoint stock in uncharted territory; it simply puts the EV stock close to where it was trading in December 2020.
With CHPT stock down by 46.5% year-to-date and near a support level of $20.00, it’s currently trading in an attractive range.
Chart courtesy of StockCharts.com
Why are analysts so bullish on ChargePoint stock?
The electrification of vehicles is undisputed, with drivers around the world switching to EVs at record rates. (Source: “Driving the Electrification of Mobility,” ChargePoint Holdings Inc, last accessed September 17, 2021.)
Ten European countries and dozens of cities plan to ban sales of new internal combustion engine vehicles by 2035. In the U.S., automakers are hoping that up to 50% of their vehicle sales will be electric by 2030.
In the U.S. and Europe, EVs are projected to account for roughly 10% of all vehicle sales by 2025 and approximately 30% in 2030 (compared to 2.6% in 2019).
To make this a reality, the U.S., Europe, and other areas will need a massive network of EV charging stations (which ChargePoint Holdings Inc can provide).
The majority of EVs can only travel 200 to 400 kilometers (125 to 250 miles) on a single charge. To prevent EV drivers from getting stressed out about their vehicles running out of electricity, the world’s roadways will need to be populated with hundreds of thousands of stations.
The cumulative EV charging infrastructure investment in the U.S. and Europe is projected to be $60.0 billion by 2030 and $192.0 billion by 2040.
CHPT Stock Overview
Founded in 2007, ChargePoint Holdings Inc has built one of the world’s largest EV charging networks.
The company makes its money from hardware, recurring software, and services (parts and labor) from its three lines of business: Commercial Products, Fleet Products, and Residential products.
ChargePoint Holdings Inc has more market share (more than 70%) in networked level 2 charging than the closest North American competitors: SemaConnect (10%), Blink Charging Co (NASDAQ:BLNK) (eight percent), EV Connect (four percent), Royal Dutch Shell (NYSE:RDS.A) (three percent), and Volta Inc (NYSE:VLTA) (two percent). (Source: Ibid.)
ChargePoint has more than 5,000 commercial and fleet customers, including 76% of the Fortune 50 companies. It also has more than 118,000 charging stations in North America and Europe.
And the company is going to get a lot bigger.
ChargePoint Holdings Inc’s addressable market is massive: every place where vehicles park in North America and Europe.
Q2 Loss Shrinks; Sales & Revenue Guidance Rise
For the second quarter of fiscal 2022 (ended July 31, 2021), ChargePoint announced that its revenue increased by 61% year-over-year to a record $56.1 million. Its networking charging revenue increased by 91% to $40.9 million. (Source: “ChargePoint Reports Second Quarter Fiscal 2022 Financial Results; Raises Full-Year Revenue Guidance,” ChargePoint Holdings Inc, September 1, 2021.)
The company reported a second-quarter net loss of $0.29 per diluted share, compared to a loss of $6.97 per share a year earlier.
ChargePoint Holdings Inc ended the second quarter with $618.5 million of cash.
For the third quarter of fiscal 2022, ChargePoint expects to report revenue of $60.0–$65.0 million. The company raised its full-year revenue outlook for the fiscal year ending January 31, 2022 from $195.0–$205.0 million to $225.0–$235.0 million.
ChargePoint Holdings Inc has the largest EV charging network, and it continues to expand. The company grew its revenue by 60% year-over-year in 2019, and it’s projected to increase its revenue at a compound annual growth rate of 60% from 2021 to 2026.
ChargePoint recently reported record second-quarter revenue; significantly grew its commercial, fleet, and residential businesses; launched a charging integration with Mercedes-Benz; announced two acquisitions; and raised its full-year guidance.
What’s not to love about ChargePoint stock?