Land and Expand Pays Off: Analyst Says ChargePoint Poised to Lead EV Charging Revolution

Benchmark analyst Mickey Legg initiated coverage on ChargePoint Holdings, Inc. CHPT with a Buy rating and a price target of $4.25.

The analyst says that the company’s land-and-expand approach has aided it in achieving an industry-leading charging network, which positioned it to capitalize on market growth as the industry matures. 

The analyst expects ChargePoint’s position to continue to expand amid the industry projected to grow at a CAGR of 16.1% to over 25 million EVs on the road in the U.S. in 2030 (from about 2.4 million).

The analyst projects 2024 to be a turn-around year for the company, with the timing of fleet programs pushed back into this year and creating a demand backlog that should fuel growth. 

The analyst expects ChargePoint’s operating margins to expand with new manufacturing partners in Asia, which should fully realize its benefits in the second half of 2024 as the inventory mix improves.

Meanwhile, Legg cites slower EV adoption, a shift by commercial customers, and increased competition as headwinds.

The analyst estimates revenue and EPS loss of $509.0 million and $(1.24) in 2024, $599.5 million and $(0.55) in 2025, and $860.9 million and $(0.16) in 2026.

This week, ChargePoint and AcBel Polytech, a Kinpo Group subsidiary specializing in power supply manufacturing, entered an agreement to develop EV charging solutions collaboratively.

Price Action: CHPT shares are trading lower by 3.16% at $1.9950 on the last check Wednesday.