Charging point (CHPT) earned an upgrade as a “best-in-class” way to play the electric vehicle charging space. CHPT stock soared from a low base, with earnings from ChargePoint expected Thursday evening.
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“The reason for our upgrade is simple – CHPT has proof of execution (and) a line of sight to profitability,” Bank of America analyst Alex Vrabel wrote in a note to clients Tuesday.
ChargePoint is a leading provider of electric vehicle charging networks in the United States and Europe. It faces competition as the global shift to electric vehicles from fossil-fuel cars gathers pace.
May 26, You’re here (TSLA) and Ford (F) announced an electric vehicle charging partnership, in which Ford will use Tesla’s superchargers and adopt its charging standard.
Charge Point Earnings
Estimates: In the first quarter, which ended April 30, analysts expect ChargePoint to narrow losses to 19 cents per share from 21 cents a year ago, according to consensus estimates from FactSet.
Revenue is expected to jump 57%, year over year, to $128.3 million. That’s above the midpoint of the company’s guidance for $122-132 million. But it would mark the fourth straight quarter of slowing sales growth.
Results: Come back on Thursday after the market closes.
Outlook: For the full year, analysts expect a net loss of 62 cents per share, according to FactSet. That would mark an improvement from a loss of 68 cents per share in fiscal 2023, which ended Jan. 31. Analysts forecast the first annual profit, of seven cents, in fiscal year 2026.
CHPT Stock Jumps Into Lower Base
ChargePoint shares climbed 14% to 9.69 trading today, beating the 50-day moving average.
CHPT stock is working on a cup shaped buy point of 13.75, according to the MarketSmith chart. But the stock has no prior uptrend and traded below the 200-day line.
Loading stock peaked last April and has been trending lower, with the 10-week moving average stuck below the 40-week line since last November. On May 19, stocks hit a record low of 7.82.
Among other electric vehicle charging stocks, EVgo (EVGO) jumped 7.8% on Tuesday, ending a streak of down days. flashing charging (BLNK) added 0.3%, rebounding from three days of decline. Dutch oil major Shell (SHEL), which completed its purchase of Volta for $169 million on March 31, lost 2.2% amid falling crude oil prices.
F shares jumped 4.1% on Tuesday. Jefferies analysts updated Ford’s stock, saying the auto giant’s strong growth plan can help it close the gap to rivals.
TSLA stock rose 4.1%, closing just above its 200-day line. Tesla CEO Elon Musk is in China to meet with senior Chinese officials this week.
The largest electric vehicle charging network
ChargePoint claims to operate the largest network of electric vehicle (EV) charging stations in the world. In Tuesday’s note, Bank of America analysts put its U.S. share at 70%.
“We emphasize the scale and diversity of CHPT as key to our belief in sustainable growth. Anchor positions in the US and European EV charging market offer an elegant but unfocused way to play electrification trends,” they said.
BofA’s Vrabel also cited the valuation and a “largely unchanged” history since the company’s 2020 PIPE (private equity investment) offering.
The analyst advised investors to look beyond headlines about the competition. Tesla already sells adapters that allow its electric vehicles to plug into fast-charging stations operated by third-party companies, he said. These companies include ChargePoint, Volta, and Electrify America.
In fact, he expects ChargePoint to benefit “from the overflow of TSLA’s already congested Supercharger network.”
Vrabel upgraded CHPT stock to buy from neutral, but reduced its price target to $14 from $15.50.
With Tuesday’s rally, ChargePoint stock is now up 1.7 years to date. It rebounded nearly 24% from the May 19 low of 7.82.
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