ChargePoint Holdings (NYSE: CHPT) first caught the attention of investors after the completion of its SPAC merger with Switchback Energy Acquisition Corporation in March last year. Changes in the economic and political environment over the past few years have created a growing market for companies like ChargePoint.
This includes Joe Biden’s $5 Billion investment to help states build EV Charging Infastructure to transition the country away from petroleum. So what can investors expect over the coming months and how will the infrastructure bill effect ChargePoint Stock? This article will breakdown everything investors need to know about the CHPT stock price forecast as we move through Q2, 2022.
ChargePoint has the clear first mover advantage
The Electric-Vehicle movement is continuing to gain momentum as countries including the United States and China move towards a future run on sustainable-energy. First movers in these emerging industries tend to gain the upper-hand early, absorbing greater marketshare and retaining long term customers. We have seen Tesla lead the charge in the EV space, now dominating the Electric Vehicle market share in North America, owning 66.3% in 2021.
ChargePoint is in a similar position, owning 70% of the US market for Level 2 charging stations. However, its marketshare in the United States and across Europe did not start over night. ChargePoint has been in business for 13+ years and have birthed the commercial charging industry as we know it. Similar to Tesla, ChargePoint is now in a position of market dominance, with investors and institutions alike forecasting ChargePoint to continue its winning streak.
Wallstreet remains optimistic on CHPT Stock Price Forecast
Stifel analyst highlights 5-10 year catalysts for ChargePoint Stock
In October, Stifel analyst Stephen Gengaro initiated coverage on ChargePoint Stock with a $29 price valuation. Gengaro noted that ChargePoint is well positioned to benefit from the steep rise in EV infrastructure spending over the next 5-10 years. Furthermore, the analyst sees Chargepoint generating a positive free cash flow by 2024.
Overall, the analyst brings up an important point regarding the companies potential catalysts over the next 5-10 years, as the companies network expands across the U.S and Europe jurisdictions. As one of the worlds largest charging networks, ChargePoint’s business is well positioned for Government subsidies over the coming years.
Jeffries analyst see’s annual revenues growing by 57%
Jefferies analyst David Kelley, is another Wallstreet analyst who sees upside in the ChargePoint stock forecast. Kelley currently holds a Buy rating and $36 price target. The analyst noted that ChargePoint is the U.S. charging infrastructure leader with 59% networked U.S. share. The analyst believes that ChargePoints scale provides “a significant advantage” over competitors according to theFly. Furthermore, Kelley’s model forecasts ChargePoint revenues to compound at an annual rate of 57% through to 2025.
Roth Capital breakdown the Hastrobe Acquisition
Roth Capital analyst Craig Irwin, currently has a $46 price target on CHPT stock. ChargePoint recently entered an agreement to acquire hastobe, a European charging network. Craig Irwin believes the acquisition is “consistent with management’s strategy of win the network first, and sell through ChargePoint hardware”. The $300 Million acquisition will give ChargePoint greater leverage within the European EV charging market.
“Today we announce our accelerating leadership position in the European EV charging market with the closing of our acquisition of hastobe, which combined with our acquisition of ViriCiti and our existing broad portfolio of charging infrastructure solutions position ChargePoint well in commercial and fleet segments.
With these acquisitions, we grew our talent pool across and have state-of-the-art research and development centers across Europe. These key milestones further strengthen our commitment to the European EV charging market, to complement our position as a leader in EV charging in North America.”said Pasquale Romano, CEO of ChargePoint October 6.
Revenue analysis – CHPT Stock Price Forecast
Firstly, in the most recent reported quarter ChargePoint generated $80.7 million in revenue. The revenue beat was driven by ChargePoint’s increased presence on commercial, fleet and residential verticals across North America and Europe.
In particular, the companies Networked Charging revenue segment grew by 109% to $59 million in the fourth quarter. For the fiscal year ending Jan 31, 2023 ChargePoint boosted their revenue guidance to $450 million to $500 million. This guidance increase smashed the Wallstreet consensus of $379 million. The increase in guidance comes at a crucial point in the stocks recovery, following a 6 month loss of 34%.
Short term revenue guidance provides investors with some insight into financial health. However, understanding the companies future expected cash flows remains fundamentally important for investors in valuing a company. The 96% projected year over year revenue growth is attracting investors looking to capitalise on EV infrastructure tailwinds.
Based on earlier investor presentations held by ChargePoint, the company forecasts long term revenue to reach $1.4 Billion by 2025 and $2 Billion by 2026.
What’s the risk with ChargePoint stock?
The charging infrastructure industry is heating up. Goldman Sachs analyst Mark Delaney noted earlier last quarter that ChargePoint will face increasing competition over the coming years. This is including competition from companies that offer charging hardware for free (Volta (NASDAQ:VLTA), which could lead to a slower long-term outlook for ChargePoint than the company predicts.
In other words, increased competition and charging models such as Volta (NYSE:VLTA) may challenge the companies ambitions at reaching $1.4 Billion in revenue by 2025. In saying this, ChargePoint still maintains the first mover advantage while companies like Volta are still in infancy phases.
The Bottom Line – CHPT Stock Price Forecast
In summary, the dynamic shift towards net-zero carbon emissions is an exciting prospect for ChargePoint investors. Furthermore, the general consensus amongst analysts remains relatively bullish with the average 12 month price target above the current trading price.
Overall, the revenue forecasts from ChargePoint for FY 2023 also suggest strong secular growth despite wider market uncertainty and supply constraints. However, the competition will continue to heat up as Governments direct more resources to EV charging infrastructure. This means ChargePoint will need to use their first mover advantage to secure funding and embed their networks on a global scale.
Follow us on Google News
Follow us on Google News here to get minute-by-minute updates on when we post on any device via the Google News App.
The content above is strictly for informational purposes only and is not financial advice nor does it constitute a recommendation. 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.