Chargepoint stock has declined by 34 percent in the last two months. However, the stock recently surged when it declared its second-quarter earnings and upgraded its revenue guidance. What's ChargePoint's (CHPT) stock price forecast going forward?
ChargePoint went through a reverse merger with Switchback Energy on March 1. It's the biggest independent EV charging infrastructure operator globally with over 150,000 charging sites across 14 countries.
ChargePoint raised its sales guidance.
On Sept. 1, ChargePoint released its second-quarter earnings. Its revenues were better-than-expected and rose by 61 percent YoY to $56.1 million, which was higher than analysts’ expectation of $49.1 million. However, CHPT’s earnings were a miss on estimates. The EPS for the second quarter was -$0.29 compared to analysts’ estimates of -$0.13.
Even after the earnings miss, CHPT stock soared in after-hours trading. The company upgraded its sales guidance for the year from $225 million–$235 million from a previous target of $195 million–$205 million. The new sales target also sits on top of analysts’ estimates of $207 million.
ChargePoint stock forecast
According to MarketBeat, ChargePoint is covered by 10 Wall Street analysts. While eight analysts have a buy, two have a hold rating on the stock. The consensus target price for CHPT stock is $34.89, which implies a potential upside of 64 percent. Most of the analysts are positive about the stock’s prospects given its huge network effect.
In August, Goldman Sachs initiated coverage on ChargePoint with a neutral rating and a target price of $24. The firm’s analyst Mark Delaney thinks that the company’s network and early mover advantage positions it favorably but at the same time it faces increasing competition.
DA Davidson initiated on the stock with a buy rating and a target price of $30 on July 29. Its analyst Matt Summerville thinks that the company is among the best-positioned names to capitalize on strong demand for EV charging infrastructure.
Is ChargePoint a good investment?
ChargePoint has the largest global EV charging network with more than 70 percent market share in the North American market, which is over 7x its next competitor. This creates a network effect, which benefits the players over competing players.
The company expects to grow its charging footprint to approximately 1.2 million–1.3 million ports over the next six-year period. As EV penetration rises, ChargePoint could take an increasingly large market share in the market, especially considering its rising partnerships. The company is also making steady progress towards installing fast chargers, which should also bode well for its future prospects.
One of the biggest catalysts for EV charging stocks, including ChargePoint, will be the Biden administration's push on EV infra. Under President Biden’s $2 trillion infrastructure plan, $174 billion is intended to be spent on the development and adoption of EVs. Biden aims to build half a million chargers by 2030 (mainly through tax incentives), which is a nearly 12 fold increase compared to the current chargers.
In the EV charging space, EVgo and Volta are other promising bets. EVgo has over 800 fast-charging locations. The company plans to triple in size over the next five years. Volta is in a high growth phase and expects growth of almost 1,500 percent in installed EV charging stations between 2020 and 2025.