Why ChargePoint's Dip Is Your Ticket To Electric Profits: What 2 Analysts Think

Shares of ChargePoint Holdings Inc CHPT fell more than 11% in Friday’s premarket session after the company reported an earnings miss and issued guidance below consensus estimates.

Sounds bad, right? Well, analysts at Needham & Co. and Oppenheimer made it known that ChargePoint was presenting itself as a buy-the-dip opportunity — and it might not stay at these lower levels for too long.

By The Numbers: ChargePoint reported a fourth-quarter loss of 23 cents per share; it missed the loss consensus of 17 cents on revenues of $158.2 million, which missed the $165.41 consensus estimate, according to Benzinga Pro.

What Investors Didn’t Like: The company expects first-quarter revenue to be in the range of $122 million to $132 million versus estimates of $152.5 million.

The Needham Analyst: Chris Pierce reinstated coverage on ChargePoint with a Buy rating and issued a $14 price target.

Pierce said Needham saw improvement in ChargePoint’s leadership position in the electric vehicle charging market when considering the likely backdrop of high industry growth as U.S. EV penetration grows.

Needham said the sour guidance would have a short-term negative impact on the stock (the sell off happening now), but it viewed the guidance as more of a one-time communication issue versus a company momentum issue and noted it didn't materially impact its long-term estimates.

Pierce said ChargePoint's capital-light model, clean business approach and dominant market position in the U.S. EV charging industry made it an attractive investment opportunity for the future.

The Oppenheimer Analyst: Colin Rusch reiterated both an Outperform rating on the stock and a $26 price target as the firm remains bullish on ChargePoint’s leadership position and operating leverage opportunity.

Rusch said that while investors focused on ChargePoint’s move away from full-year guidance, it saw commercial EV production acceleration as a bullish sign along with incremental LDV ramps.

The company now has more than 225,000 network ports under management, Rusch noted, with roaming ports reaching 465,000.

ChargePoint is focused on cost management and operating leverage as commercial EV production accelerates and supply chain issues ease. The company's revenue growth is expected to reach 39%, with 670 basis points gross margin and more than 2,000 basis points operating margin improvement in fiscal 2024.

CHPT Price action: Shares of ChargePoint are trading 7.73% lower to $10.39, according to data from Benzinga Pro.

Photo: Courtesy ChargePoint