Stock Wars: ChargePoint Vs. Volta

Benzinga’s weekly Stock Wars matches up two leaders in a major industry sector with the goal of determining which company is the better investment.

This week, the duel is between two electric vehicle charging station manufacturers: ChargePoint Holdings Inc. CHPT and Volta Inc. VLTA.

The Case For ChargePoint: This Campbell, California-headquartered company was launched in 2007 as Coulomb Technologies. Within a decade of its creation, the company operated one of the world’s largest EV charging station networks with more than 35,000 locations across North America and Australia. That number swelled in 2017 by another 9,800 when ChargePoint took over the EV charging operations from General Electric Company GE.

The company raised $240 million in November 2018, with President and CEO Pasquale Romano telling the Silicon Valley Business Journal that ChargePoint was “a solid public company candidate.” But the company didn’t go public until February 2021, and only then it was through a reverse merger with a special-purpose acquisition company (SPAC) reverse merger in February 2021.

In its recent corporate developments, ChargePoint announced the completion last month of the first of six EV fast-charging corridors in partnership with the Colorado Energy Office. In March, the company partnered with Goldman Sachs Group Inc GS Renewable Power, a long-term investor in clean energy projects, on new tailored financing solutions as part of the ChargePoint as a Service product family designed to reduce upfront costs of EV charging technology for eligible customers.

In its most recent earnings report, the fiscal year, fourth-quarter data published on March 3, ChargePoint recorded $80.7 million in revenue, a 90% boost from $42.4 million in the prior year’s same quarter. The company also recorded a GAAP net loss was $60.5 million, which included a $16.9 million gain from the change in fair value of warrant liabilities and $15.4 million in stock-based compensation expense; the fiscal year fourth-quarter 2020 net loss was $90.7 million. ChargePoint’s quarterly net loss per basic share was -18 cents, compared to -$5.31 one year earlier.

Looking ahead, the company offered fiscal year, first-quarter guidance with revenue of $72 million to $77 million and a full fiscal year revenue of $450 million to $500 million.

“We had numerous successes in our first year as a publicly traded company, including a 65% year-over-year increase in annual revenue, two strategic acquisitions, expansion of our activated port count by over 60 percent, and growing our team of world class talent,” said Romano.

ChargePoint shares opened for trading on Wednesday at $13.48, which was towards the lower side of the 52-week range of $11.21 to $36.86.

See Also: Benzinga’s complete Stock Wars series

The Case For Volta: This company was founded in Hawaii in 2010, with Leonardo DiCaprio participating as an early investor in the company — and he still plugs the company on his Twitter Inc TWTR account.

Volta, which later relocated its headquarters to San Francisco, differed from its competition by not requiring payment from the customers of its stations. Instead, it monetizes operations by selling advertising on the charging station’s video screens. Volta took the SPAC merger route to becoming publicly traded — it transitioned away from being privately owned in August 2021.

In recent corporate developments, the company announced last month that Chief Revenue Officer Brandt Hastings would serve as interim CEO after co-founder Scott Mercer stepped down from the chairman and chief executive roles; co-founder and President Chris Wendel has also resigned from the company and the board of directors, but no replacement was named for him.

Also last month, the company launched PredictEV Fleet, the second product within its suite of machine learning and artificial intelligence solutions for infrastructure planning, with a multi-year commitment from the utility Southern Co SO. In March, Volta Inc. announced a partnership with Tanger Factory Outlet Centers Inc. SKT to install charging stations at Tanger malls in nine markets across the country.

In its most recent earnings report, the fiscal year, fourth-quarter data published April 15, Volta recorded revenue of $12.1 million, up 45% from the $8.3 million recorded one year earlier, while its net loss was $121.1 million compared to a loss of $31.5 million in the prior-year period. Volta had a net loss per basic and diluted share of -77 cents, compared with -$3.33 one year earlier.

Volta offered a fiscal year, first-quarter guidance of revenue in the range of $8 million to $8.5 million and a full year 2022 revenue in the range of $70 million to $80 million.

“2021 was a transformative year for both the company and the industry," said Francois Chadwick, CFO of Volta. "We continue to see significant growth in the market, and we are well-positioned to take advantage of this acceleration."

Volta’s shares opened for trading on Wednesday at $2.25, which was at the lower end of the 52-week range of $2.01 to $14.34.

The Verdict: The resignation of Mercer and Wendel was a shock to Volta’s system, with its stock plummeting by 18% when the news broke. Their exit came a week after the company’s decision to postpone its earnings report without explanation.

“With Volta’s listing as a public company last August, the board and founders mutually determined that now is the right time to identify new leadership with experience in managing public companies to serve the best interests of shareholders and unlock the company’s full value potential,” said co-chairman Vince Cubbage in Volta’s March 28 statement announcing the departure of Mercer and Wendel.

And therein lies the problem with Volta — a “full value potential” remaining locked up for an indefinite period. Granted, the company is moving in the right direction, as per the achievements cited earlier plus expanded partnerships with Walgreens Boots Alliance Inc WBA and Cinemark Holdings, Inc. CNK and an expansion into Europe, but it still has many miles to go to become much more profitable.

ChargePoint is the more stable of the two companies. In March it was named to Fast Company’s list of the World’s Most Innovative Companies for 2022, ranking third among companies in North America; this was the second time Fast Company paid tribute to ChargePoint.

But ChargePoint stock is trading much lower than it should — and considering the company does not have the tumult facing Volta, such a weak performance doesn’t build confidence. And while the company is building muscle through a series of high-profile partnerships, the EV market is still a niche sector in the U.S. — only about 4% of the cars on the road are electric powered.

Nonetheless, the automotive industry is moving — perhaps too lethargically — to an electric future and ChargePoint is currently in a better position to take advantage of this automotive transition. While there is no reason to doubt that Volta can write a more successful next chapter in its story, today’s Stock Wars duel is decided in favor of ChargePoint.

Photo: Mike's Photography / Pixabay