ChargePoint: Low Quality Beat
- ChargePoint beat FQ2'22 revenue estimates, but the losses are mounting.
- The company guided up FY22 numbers partly due to acquisitions.
- The stock still trades at an estimated 21x FY23 number leaving limited upside for the stock and reinforcing why venture funds sold 13.8 million shares.
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After solid FQ2'22 earnings, ChargePoint Holdings (CHPT) has seen a nice bump in the stock. Now investors have to confront the valuation divide and deal with the past insider sales likely leading to future sales on any stock rallies. My investment thesis remains very Bearish on the EV charging station stock on any rallies into the mid-$20s.
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Update - Sept. 8
Be cautious when analysts struggle to make the bullish case on expensive stocks, though $20 has been strong support.
- Bank of America launches coverage on ChargePoint Holdings (NYSE:CHPT) with a Neutral rating.
- While ChargePoint is seen as positioned to capitalize on the growing electric vehicle penetration, BofA is cautious amid supply chain challenges, emerging competition, elevated expectations and a valuation check. The firm comes up with a $26 price objective through a discounted cash flow analysis through 2030.
- Analyst Ryan Greenwald on ChargePoint: "CHPT is the operator of the largest online network of independently owned EV charging stations with over 5K customers across its footprint. The company’s asset-light B2B operating model is a competitive advantage in contrast to some peers who opt to own and operate the chargers in a more capital-heavy approach. The reduced barriers to entry and less upside from scaling utilization are offset by materially improved FCF visibility."