ChargePoint Holdings Inc (NYSE: CHPT) has seen a surge in investor confidence over the past week with the stock gaining 38.77%. The gain came after President Biden announced the Governments infrastructure plan which will see roughly $175 Billion pumped into the EV sector. Amongst the beneficiaries of this package, over 500,000 charging stations will be installed. Furthermore, Wallstreet analysts are backing CHPT with the average 12 month price target sitting at $34.50 a share (upside of 19%). This article will breakdown everything investors need to know about ChargePoints stock forecast for 2022.
Table of contents
What are analysts forecasting for CHPT stock in 2022?
Firstly, across the board of Wallstreet analysts the general consensus is a Buy. The average 12 month price target is sitting well above the current trading price. Considering the recent uptrend in the stocks price, this is a good sign for investors. Institutional analysts who have weighed in include Oppenheimer, Cowen and CitiGroup. The following are the more recent targets from these firms:
CitiGroup 3/31/2021 – analyst Itay Michaeli at CitiGroup initiated coverage with a price target of $28 a share and a neutral rating.
Cowen 3/15/2021 – analyst Gabe Daoud initiated coverage with a 12 month price target at $43 a share and a Outperform rating on the stock. This suggests Cowen see upside potential from the current trading price of 44%.
Oppenheimer 3/8/2021 – analyst Colin Rusch set the firms 12 month price target to $39 a share and also included an Outperform rating.
In summary, the bullish consensus amongst analysts is a positive sign for investors with the majority of targets priced above the current trading price. Furthermore, the two outperform ratings also suggest the company will be able to capitalise on market opportunities over the next 12 months according to analysts. However, CHPT has only been trading for a short period of time and should see a greater variety of analysts cover the stock throughout the year to come. Hence, this will allow for a greater range of data from analysts which can provide less obscurity.
Financial outlook for CHPT stock in 2022 and beyond
Firstly, its important to understand the current performance of the recently merged EV charging company. As we know after the completion of a SPAC merger, the combined business receives a strong influx of cash to inject into the business. In the fourth quarter earnings, the company noted its current cash position of $615 million. This cash position has dramatically improved from its pre-merger position of $145 million as of January 31st 2021. The increased cash flow is healthy for the balance sheet and will be vital in assisting CHPT grow in 2021-22.
Secondly, the revenue generated in the fourth quarter was recorded at $42.4 million which was a YOY decrease of 1.8%. For the fiscal year of 2020, the company generated $146.5 million which was a slight improvement YOY. Now if we look at the revenue forecasts for 2022/23 we can see why investors are excited. Analysts expect the company to generate $204.9 Million in revenue in 2022. Furthermore, this is expected to increase to $345.7 Million in 2023. This represents a YOY improvement in revenue of 68%.
“In 2020, we continued to strengthen our market leadership position and expect our growth to be fueled by dozens of new EV models anticipated in 2021 across a wide range of segments and price points. With a strong balance sheet and a capital light business model, ChargePoint is well positioned to create shareholder value through broad attachment to the electrification of mobility for fleet and consumer vehicle markets.”said Pasquale Romano, President and CEO of ChargePoint
What’s the risk with ChargePoint stock?
It is important to understand the associated firm-specific risk of a company. ChargePoint has now been trading for a month as a combined company (post merger) and has seen high levels of volatility. This of course is nothing new for the Electric Vehicle industry, with many industry related companies seeing large swings in share volume. Hence, the higher levels of volatility experienced can cause the share price to fluctuate dramatically.
In summary, the dynamic shift towards net-zero carbon emissions is exciting ChargePoint investors. Furthermore, the general consensus amongst analysts is bullish with the average 12 month price target above the current trading price. In addition, the revenue forecasts from analysts also suggest strong growth YOY. However, the volatility of the EV market over the past 6 months will play on investors risk appetite as the industry related volatility will inevitably effect CHPT stock.
Written by Tyger Fitzpatrick, Founder of Youth Investment Group.
The information above is not financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.
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