Shares of ChargePoint (NYSE:CHPT) are under pressure due to the overall selling in the stock market and supply-chain concerns. The recent selling of its stock has eroded over 30% of its value in the past month.
It’s worth noting that ChargePoint, a leading EV charging network, has negative indicators from hedge funds, insiders, and investors.
TipRanks’ Hedge Fund Trading Activity tool shows hedge funds have offloaded 2.1 million ChargePoint shares in the last three months. Meanwhile, corporate insiders sold ChargePoint stocks worth 27.5 million during the same period.
Further, TipRanks’ Stock Investors tool shows that investors holding portfolios on TipRanks have a Very Negative outlook on ChargePoint stock. The data reveals that 1.6% of these investors decreased their exposure in the past month.
What’s Next?
Despite the supply concerns, Jefferies analyst David Kelley is upbeat on CHPT’s growth trajectory. Kelley highlighted that ChargePoint’s “GM execution in a difficult supply chain environment & continued sales ramp are encouraging signs.”
ChargePoint delivered an adjusted gross margin of 27% in Q3 compared to 20% in the prior-year period. Moreover, it compared favorably to the gross margin rate of 23.1% in Q2. The continued improvement in its cost of goods sold and benefits from its European acquisitions have led to an expansion in Q3 margins.
Looking ahead, Kelley stated that ChargePoint “can generate annual sales approaching $1bn with scale, leverage, & execution driving positive EBIT by FY’25 (CY’24).”
Notably, ChargePoint’s prospects are tied to EV penetration, which will likely increase in the future owing to favorable government policies supporting the electrification of mobility.
A growing addressable market, recurring revenues, and capital-light business model augur well for growth.
Wall Street’s Take
Given the supply-chain concerns, Wall Street is cautiously optimistic about CHPT stock. On TipRanks, ChargePoint has received 6 Buys and 4 Holds for a Moderate Buy consensus rating.
Further, ChargePoint’s stock forecast and price targets on TipRanks show solid upside due to the recent correction in its price. The average ChargePoint price target of $30.22 indicates 61.3% upside potential to current levels.
Disclosure: On the date of publication, Amit Singh had no position in any of the companies discussed in this article.
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