ChargePoint's Path To Profitability Recognized By Analyst, Upgrades Stock To Buy

Shares of ChargePoint Holdings Inc CHPT climbed in early trading on Tuesday, ahead of its first-quarter earnings release scheduled for Thursday.

The company has “proof of execution” and a clear route to cash inflection and profitability, according to BofA Securities.

The ChargePoint Analyst: Alex Vrabe upgraded the rating for ChargePoint from Neutral to a Buy, while reducing the price target from $15.50 to $14.00.

The ChargePoint Thesis: The company is the leading provider of networked electric vehicle chargers in the U.S., with a market share of around 70%, Vrabe said in the upgrade note.

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Management’s projection of "a cash inflection" in the fourth quarter of 2024 appears realistic, and ChargePoint could generate operating cash of $19 million in that quarter and more than $100 million in 2025, the analyst stated.

“While we estimate ~$300mm in operating cash burn in 2023/24 ($200mm in CY23), we believe that $295mm in cash plus $105mm in short term notes limits CHPT’s need to tap capital markets to reach free cash generation,” Vrabe further wrote.

He added that the company’s growth outlook “remains a simple correlation to EV sales which we expect will continue despite recent headlines on competition,” especially a deal between Ford and Tesla.

CHPT Price Action: Shares of ChargePoint had risen by 11.7% to $9.49 at the time of publishing Tuesday.

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