Going by the initial reaction to ChargePoint’s (CHPT) latest quarterly earnings (F4Q22), it looks a company can now miss on either one of the top-and bottom-line metrics but as long as the outlook is favorable, investors don’t seem to mind.
The EV charging station leader delivered EPS of -$0.23, falling short of the consensus forecast by $0.05. On the topline, however, the company beat the Street’s call by $4.57 million as revenue climbed 90.3% year-over-year to reach $80.7 million. More importantly, ChargePoint’s full-year revenue guidance is in the $450 million to $500 million range, far above consensus expectations of $380 million. Despite the constrained supply chain environment, the company sees its growth rate accelerating to 96% this year – from 65% in the last fiscal year.
Evercore’s James West puts the strong momentum down to the key acquisitions the company has made along with investments into its “infrastructure and scale.” West calls electric mobility a “mega theme,” with the company “directly tied to the accelerating adoption of EVs in North America and Europe.”
In fact, over the next 20 years, in the U.S. alone, West anticipates a 60-fold increase of the TAM in U.S. charging demand — and the analyst sees this company positioned right at the forefront of this secular trend.
“As a first mover in a rapidly growing market ChargePoint enjoys an advantage due to its scale, land and expand strategy, consistent focus on R&D and new software and hardware advancements,” West said. “We continue to believe the company is viewed as an index for charging and investors look to it first for exposure to the sector given its scale, transatlantic reach, and role as the ‘arms dealer’ for the industry.”
Unsurprisingly, then, West reiterated an Outperform (i.e. Buy) rating on CHPT, although to “reflect a lower market multiple,” he cut his price target from $34 to $28. Nevertheless, the figure still implies shares will climb ~87% higher over the coming year. (To watch West’s track record, click here)
The Street’s average target is only slightly more modest; at $24.5, the figure represents one-year gains of ~63%. Overall, based on 7 Buys vs. 3 Holds, the stock has a Moderate Buy consensus rating. (See CHPT stock forecast on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.