ChargePoint Holdings, Inc.

CHPT Details

ChargePoint Holdings, Inc. (NYSE: CHPT) manufactures and markets networked electric vehicle (EV) charging system infrastructure and cloud-based services that allow users to search for, reserve, authenticate, and transact EV charging sessions. It offers an open platform that connects to its system hardware and other manufacturers, connecting systems through an intelligent network that provides real-time charging session data. Owners of charging stations, fleet managers, drivers, and utilities can access various web-based portals through the company's network.

Latest News:

• Accorded as one of the World's Most Innovative Companies of 2022: On 08 March 2022, CHPT was ranked third among North American firms on Fast Company's distinguished annual list of the World's Most Innovative Companies for 2022. Fast Company has recognized ChargePoint for its leadership in enabling global electrification, from passenger vehicles to fleets, through a network of more than 174,000 active charging points that bring charging to more people and locations than ever before. Fast Company has recognized ChargePoint for the second time; the company was previously ranked fifth among transportation companies.
• Partnership with Wheels Donlen: On January 5, 2022, On 22 February 2022, CHPT and Wheels Donlen, a leader in automotive fleet management, announced a partnership to deliver fleet mobility and home charging solutions to Wheels Donlen customers. As per the partnership, Wheels Donlen customers will have access to the CHPT’s countrywide charging network, at-home charging gear, and cloud software that allows comprehensive administration and integrated invoicing for fueling across customer fleets.

FY22 Results

• Solid Revenue Growth: The company reported a sharp uptick of 65.43% in revenue to USD 242.34 million in FY22 (ended January 31, 2022) from USD 146.49 million in FY21, owing to 89.73% YoY growth in the Networked charging system.
• Net Losses Reduced: However, its net loss for FY22 reduced to USD 132.57 million from USD 197.02 million reported in FY21.
• Strong Balance Sheet: CHPT exited the fiscal year with a cash balance of USD 315.24 million and no outstanding debt.

Key Risk:

• Supplier Concentration Risk: CHPT relies on a small number of vendors to manufacture its charging stations. In addition, a single vendor supplies part of the company's goods and components. As a result, any breach of contract by vendors could jeopardise the company's operations.

• Dependency over faster EV adoption: The adoption of electric vehicles by businesses and customers is critical to CHPT's future success. As a result, any drop in EV demand or slowing of the EV industry's growth might put the company's financial and operational success at risk.

Outlook:

• FY23 Guidance: CHPT expects to clock revenues of USD 450 – 500 million in FY23 (ending January 31, 2023) as of FY22. It also expects to achieve a non-GAAP gross margin of 22% - 26%.

 Valuation Methodology: Price/Sales Per Share Multiple Based Relative Valuation

(Analysis by Kalkine Group)

* % Premium/(Discount) is based on our assessment of the company's FY1 trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

 Stock Recommendation:

CHPT's stock price has fallen 46.71% in the past nine months and is currently leaning towards the lower end of its 52-week range of USD 11.21 to USD 36.86. We have valued the stock using the Price/Sales-based relative valuation methodology and arrived at a target price of USD 19.01.

Considering the significant correction in the stock price, solid top-line performance, recent collaborations and accreditations, positive outlook, associated risks, and current valuation. We recommend a "Speculative Buy" rating on the stock at the closing price of USD 15.73, up 9.24% as of March 07, 2022.

Three-Year Technical Price Chart (March 07, 2022). Source: REFINITIV, Analysis by Kalkine Group

Technical Analysis Summary:

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

Note 1: The reference data in this report has been partly sourced from REFINITIV.  

Note 2: Investment decision should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the Valuation has been achieved and subject to the factors discussed above.