ChargePoint Holdings, Inc.

CHPT Details

ChargePoint Holdings, Inc. (NYSE: CHPT) is a supplier of electric vehicle (EV) charging networks dedicated to facilitating the electrification of mobility for all people and things. It is developing a new fueling network to transport people and products using electricity. Its cloud subscription platform and software-defined charging devices are intended to contain solutions for any charging situation, from residential and multifamily to the workplace, parking, retail, and all forms of transportation fleets. It gives individuals access to many charging stations in North America and Europe.

Latest News:

• Strong Collaborations: CHPT announced a partnership with Goldman Sachs Renewable Power (GSRP), a strategic, long-term investor in sustainable energy projects, on March 29, 2022. CHPT and GSRP are launching new customized financing alternatives as part of the ChargePoint as a Service (CPaaS) product line to help eligible customers lower the upfront expenses of EV charging infrastructure. In addition, on March 28, 2022, CHPT and Gatik, a leader in autonomous middle mile logistics, announced a strategic agreement to establish an electric ecosystem for autonomous cars that will maximize sustainability and economics for CHPT and Gatik's clients across North America.

FY22 Results

• Boost in Topline: CHPT's revenue increased by 65.43% 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.
• Reduction in Losses: Its net loss for FY22 fell to USD 132.57 million, down from USD 197.02 million in FY21.
• Debt-Free Balance Sheet: As of January 31, 2022, the company's cash and cash equivalents stood at USD 315.24 million, with no outstanding debt.

Key Risks:

• Supplier Concentration Risk: A restricted number of vendors manufacture CHPT's charging stations. Furthermore, a single vendor provides a portion of the company's goods and components. As a result, vendors' violation of the contract could jeopardize the company's operations.

• Dependency on faster EV adoption: Electric vehicle adoption by businesses and customers is vital to CHPT's future success. As a result, any decrease in EV demand or stalling in the EV industry's growth could jeopardize the company's financial and operational success.

Outlook:

• FY23 Guidance: As of March 02, 2022, CHPT anticipates USD 450 – 500 million in revenues in FY23 (ending January 31, 2023). It also expects a non-GAAP gross margin of 22 to 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 been volatile throughout the year, fallen 39.72% in the past nine months and is currently leaning towards the mid-band 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 23.88.

Considering the significant correction in the stock price, solid top-line performance, robust collaborations, constructive outlook, Debt-Free company, associated risks, and current valuation, we recommend a "Speculative Buy" rating on the stock at the closing price of USD 19.88, up 2.63% as of March 31, 2022.

Three-Year Technical Price Chart (as of March 31, 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.