It’s no secret the nascent EV industry is going through a difficult period with weakening demand negatively impacting EV makers. That has also resulted in difficulties for ancillary EV names, such as EV charging station network operator ChargePoint (NYSE:CHPT).
Amidst an alarming drop in revenue, ongoing lack of profitability and major dilution, the shares have been hit hard, collapsing by 85% over the past year.
The company, however, has been attempting to steady the ship, and last week announced that it is performing a “strategic reorganization” of the business. That includes a 12% cull to the workforce that should result in $14 million of restructuring charges but lead to annual opex savings of $33 million.
J.P. Morgan’s Bill Peterson reminds investors that this is the second such reduction to take place over the last 6 months and he also anticipates additional “strategic actions” in the coming quarters in the ongoing quest to improve profitability.
Having met recently with new CEO Rick Wilmer and interim CFO Mansi Khetani, Peterson came away with the feeling the company can “do more with less,” i.e., even with less personnel, it can maintain the “growth trajectory of the business without sacrificing market share.”
“In any case,” Peterson further said, “we expect that US EV sales should grow between 10-15% at the very least and up to 30-45% in 2024, which should put ChargePoint in a better position relative to 2H23, coupled with better operational execution and continued growth from commercial and fleet contracts.”
More information regarding how the company plans on reaching its target of turning EBITDA positive by Q4 of this calendar year should come to light when ChargePoint reports its fourth quarter of fiscal 2024 results in March.
All told, Peterson remains a fully-fledged CHPT bull, sticking with an Overweight (i.e., Buy) rating and $5 price target, suggesting the shares have room for one-year growth of a strong 176%. (To watch Peterson’s track record, click here)
5 other analysts join Peterson in the bull camp, and with the addition of 12 Holds, the stock claims a Moderate Buy consensus rating. While the $3.28 average target is not quite as bullish as Peterson’s objective, it still implies shares will appreciate by a solid 80% over the course of the year. (See ChargePoint stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
