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ChargePoint Stock Riding on EV Penetration
Stock Analysis & Ideas

ChargePoint Stock Riding on EV Penetration

Shares of the leading EV charging network ChargePoint Holdings (CHPT) closed 7.7% higher on Monday. While there was no company-specific news, investors’ optimism on the overall EV sector drove ChargePoint higher. 

Interestingly, ChargePoint stock has gained over 20% in the last 10 trading days as investors turned positive. Notably, TipRanks’ Stock Investors tool shows that investors holding portfolios on TipRanks maintain a Very Positive outlook on CHPT stock, with .9% of these investors increasing their exposure in the past seven days.

Despite the recent buying and favorable industry trends, ChargePoint stock is trading in the red and is down about 23.7% since listing on the exchange on March 1. 

Pressure on margins, competitive headwinds, and supply-chain concerns have weighed on ChargePoint stock. Further, insiders have been selling CHPT stock. Per TipRanks’ Insider Trading Activity Tool, corporate insiders have sold ChargePoint shares worth $6.9 million in the last 3 months.

Nevertheless, ChargePoint’s growth is closely tied to EV penetration, which is likely to grow over the years. Therefore, I have a Bullish outlook on ChargePoint stock. 

ChargePoint expects passenger EV sales to grow at a CAGR of 41% from 2020 to 2026, providing a solid foundation for multi-year growth. 

Moreover, it has multiple growth vectors, including a large addressable market, leadership positioning in North America, expansion in Europe, and a capital-light business model. 

Highlighting its market-leading competitive positioning, Needham analyst Vikram Bagri stated that ChargePoint has “achieved this dominance through superior software, excellent customer service, a head start over its peers, quality hardware and consistent innovation.”

Bagri has a Buy rating on CHPT stock with a price target of $35, reflecting a 52.2% upside potential.

Overall, the ongoing electrification of mobility, its diversified revenue streams, strength in the high-margin recurring software subscription and services revenues, and growing customer base augur well for growth. 

However, ChargePoint continues to invest heavily in sales and marketing, which could pressure its margins in the near term. 

On TipRanks, ChargePoint has an analyst rating consensus of Moderate Buy, based on 7 Buys, 3 Holds, and 1 Sell. Moreover, ChargePoint scores a 9 out of 10 from TipRanks’ Smart Score rating system, implying it will likely outperform the market.

See Top Smart Score stocks >>

The average ChargePoint Holdings price target of $32.89 implies a 43.1% 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.

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices or performance.

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