ChargePoint's Key Role In The EV Charging Landscape: Oppenheimer's Outperform Rating Explained

Oppenheimer analyst Colin Rusch reiterated an Outperform rating on the shares of ChargePoint Holdings Inc CHPT with a price target of $8.26.

In the wake of several OEMs signing agreements to access Supercharging network, the analyst puts forward its views on the EV charging landscape and ChargePoint’s role.

Management indicated connector type (NACS vs CSS) was a non-issue for CHPT, given chargers can be retrofitted within 20 minutes, said the analyst.

While Tesla Inc TSLA owns much of the fast-charging network currently available, management noted TSLA charges a premium for non-Teslas, which may discourage certain users.

CHPT noted its ability to service any OEM design as vehicle OEMs prioritize broad availability of charging stations to facilitate EV adoption, noted the analyst.

CHPT pointed to optimal functionality of Li-ion batteries when charge is capped around 80-90%, limiting fast charge rates to around 2C, highlighting that the company is well ahead of vehicle design in fast charge capability.

The general synchronicity of charging (same-time use) taxing the grid and low utilization of grid capacity (4% for passenger cars, 20-30% for fleets) provides ample opportunities for energy storage buildout to support charging infrastructure, noted the analyst.

Management’s stand that the bulk of R&D spend is behind the company and that they are now seeing efficiency gains that will translate into positive operating leverage as channel revenues grow is a positive, said the analyst.

According to the analyst, demand continues to be robust as EV sales grow in multiple geographies driving charging infrastructure buildout.

Also, the company is well capitalized as it drives toward positive adjusted EBITDA in F2Y4 and manages working capital needs for growth, added the analyst.

Price Action: CHPT shares are trading higher by 5.69% at $8.73 on the last check Monday.