ChargePoint Stock Price Forecast September 2021 – Time to Buy CHPT?

ChargePoint (CHPT) stock was trading sharply higher in US premarket price action today after reporting its fiscal second-quarter 2022 earnings. The company went public earlier this year through a reverse merger with Switchback Energy.

SPAC (special purpose acquisition company) merger has been the preferred listing mechanism for companies in the green energy ecosystem. In the charging space, EVgo and Volta Charging are among the companies that opted for a SPAC reverse merger to go public. Coming back to ChargePoint stock, it still trades at less than half of its 52-week highs. What’s the forecast for CHPT stock and is it a good buy in September?

ChargePoint reported mixed earnings

ChargePoint reported revenues of $56.1 million in the fiscal second quarter of 2022 that ended in July. The revenues increased 61% as compared to the corresponding period last year and were significantly above the $49.1 million that analysts were expecting. The company’s loss per share was 29 cents which were way ahead of the 13 cents per share loss that analysts were expecting. However, markets seem pleased with the strong topline growth.

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CHPT raised its guidance

Investors have been unforgiving of companies missing their topline estimates and providing a tepid growth outlook. However, ChargePoint not only posted better than expected revenues in the quarter but also raised its guidance for the full year. The company expects to post revenues between $60-$65 million in the current fiscal quarter which is higher than the $54.7 million that analysts were expecting. CHPT also raised the full-year revenue guidance to $225-$235 million which was above the previous guidance of $195-$205 million.

The company ended the quarter with total cash of $618.3 million and received $44.3 million as cash in the quarter as investors exercised warrants. “ChargePoint’s strong second quarter results demonstrate our continued growth and leadership in the electric revolution,” said Pasquale Romano, CHPT CEO.

ChargePoint stock price forecast

Wall Street analysts are bullish on ChargePoint stock and seven out of the eight analysts polled by CNN Business rate it as a buy. One analyst has rated the stock as a hold. Its median target price of $39 is a premium of 84% over current prices. The street high target price of $46 implies an upside potential of 117%. The stock even trades 13% below the street low target price of $24.

CHPT stock price long-term forecast

The long-term outlook for CHPT stock looks positive amid the global pivot towards electric vehicles. ChargePoint has a strong position in the charging industry in North America and Europe and has more than 5,000 commercial and fleet customers. The company has also partnered with automakers and in June it announced a partnership with Mercedes Benz USA. While Tesla is investing in its own charging network called the Superchargers, others are partnering with third parties. Lucid Motors, for instance, has partnered with Electrify America.

Charging networks would be crucial for the higher adoption of electric cars. No wonder the Biden administration has committed billions of dollars towards charging infrastructure under the $1 trillion infrastructure plan.

Analysts on ChargePoint stock

In June, Jefferies initiated coverage on CHPT stock with a buy rating and termed ChargePoint a “leader” in the charging space. “As the US charging infrastructure leader, we expect CHPT leverages scale and integrated hardware, software, & services features to drive +57% sales CAGR, tracking with ramping US & Europe EV (electric vehicle) adoption & growing charging demand,” it said in its note.

Needham also initiated coverage with a buy rating and $39 target price and pointed to ChargePoint’s “first mover advantage and capital light business model.”

A JD Power survey found that ChargePoint is among the top three charging networks in the US. Tesla and Volta are the other two companies in the top three.

Valuation and technical analysis

Looking at the valuations, ChargePoint currently trades at an NTM (next-12 months) enterprise value-to-sales multiple of 24x. The multiples might seem high as the company is a growth name. However, its revenues and profits should soar in the long term as the adoption of electric cars grows. Notably, the current valuation multiples are the lowest since CHPT was listed.

CHPT stock trades below the 50-day SMA (simple moving average). We don’t have longer-term moving averages as the stock was only recently listed.

That said, ChargePoint stock looks like a good EV charging stock to buy and play the pivot from ICE (internal combustion engine) cars to electric cars. While EV companies like Tesla and NIO would reap the benefits of soaring sales of electric cars, ancillary companies like CHPT would also be among the beneficiaries.

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