The electric-vehicle infrastructure firm ChargePoint has good news for growth investors who have had to endure a brutal selloff in stocks with links to special-purpose acquisition companies. Its earnings show some of those businesses are doing just fine.
ChargePoint (ticker: CHPT) reported results for its fiscal first quarter on Thursday evening. Sales came in at $40.5 million, above the $40 million at the high end of the range management had told investors to expect. Sales matter more than earnings in this case because ChargePoint is a new company and not profitable yet.
“Our first quarter reflects the strength of our diversified business model across commercial, fleet and residential, and the benefits of our industry-leading scale,” said CEO
in the company’s news release. “We added more new customers than in any prior quarter and our commercial business experienced a strong recovery, after COVID-19 related headwinds last year.”
For the second quarter, ChargePoint expects sales of about $48 million, in line with Wall Street projections.
“This isn’t about good or bad,” the CEO said of the results. “We want to show the universe we can predict our sales and hit our numbers.”
Up is good news for investors in SPAC-related stocks—those that have merged with the blank-check companies to tap capital they have raised, and those that plan such deals. SPAC stocks had a big 2020, but the combination of more scrutiny from the Securities and Exchange Commission regarding their accounting and a shift out of more highly valued, speculative stocks has hurt their performance.
Defiance Next Gen SPAC Derived ETF
(SPAK) is down 27% from its February 52-week high. That ETF holds more than 200 SPAC-related firms. ChargePoint completed its merger with a SPAC in February.
ChargePoint stock, for its part, is down 34% from its December 52-week high, though it has begun to level off, with a gain of about 14% over the past month.
Trends in the EV industry have something to do with the stabilization. EV sales continue to grow. Auto makers are planning to launch more models in coming years, and at a much faster pace than investors contemplated at the start of 2021. ChargePoint’s stations get more busy as the total number of EVs on roads expands.
Barron’s likes business models based on charging EVs. We pointed out in April that shares of companies in that area were starting to look attractive after the selloff. ChargePoint shares are up 22% since that article appeared, while the stocks of the four EV-charging companies—ChargePoint, EVgo, EVBox, and Volta—are up about 9% on average. The S&P is flat over the same span.
The other three EV charging stocks haven’t completed their SPAC mergers yet.