ChargePoint Stock Has a Really Compelling Long Term Case

It hasn’t been easy to own ChargePoint (NYSE:CHPT) stock in the last year.

EV stocks: A close-up shot of a ChargePoint (CHPT) charging station.
Source: YuniqueB / Shutterstock.com

First, the stock got caught up in the electric vehicle (EV) bubble that began to inflate in late 2020 and popped in the first quarter of 2021.

Since then, CHPT stock has been subject to the whims of the infrastructure bill that languishes in Congress.  

The bullish case for ChargePoint is clear. The world is moving towards electric vehicles. However, there is a chicken-or-egg question for investors to consider.

That question is which comes first the EVs themselves or the charging infrastructure to support them.

If you believe, as I do, that the latter has to lead the way, then you’ll have a framework to understand why CHPT stock is a good speculative investment.  

There are a lot of competitors entering this space. And there will likely be more on the way. But this is one time where being a first mover, and sector leader, is likely to pay off for investors.  

Competition Will be Intense 

When I think about competitors to ChargePoint, I tend to stop at Blink Charging (NASDAQ:BLNK) and Tesla (NASDAQ:TSLA).

However, that’s an oversimplification of what is an expanding list of competitors. For example, Royal Dutch Shell (NYSE:RDS.A) has plans to launch 500,000 charging stations in the next four years.

This makes sense since Shell is the market leader with 25,000 branded service stations located throughout the United States. It’s unlikely that the company would just quietly abandon that leadership position. 

There’s also BP (NYSE:BP) to consider. The company is investing $7 million in IoTecha, a smart EV charging firm. This supports BP’s goal of providing over 70,000 public EV charging points throughout the world by 2030.  

And there are other companies that are also making aggressive moves on the charging station front. Hyundai (OTCMKTS:HYMTF), for example, is selling Level 2 home charging stations that could help to ease range anxiety.  

Fortunately, the pie will be large enough to go around. If Shell and BP hit their targets that would still leave nearly 500,000 charging stations that need to be built out by 2030.

While that may not sound like that much of a boost, remember that once a charging station is built, ChargePoint will get those two words that investors love to hear, recurring revenue.  

The EV Infrastructure 

I frequently go an entire day without thinking of charging my smartphone. Yet, I almost always fully charge it every night. My children, on the other hand, seem to have their phones plugged in every second of the day. Talk about range anxiety. 

The reason I bring this up is that neither one of us is right. It’s just a preference. But I do see a parallel with electric vehicles.

I suspect that EV “service stations” won’t be where the action is at. I believe the real market is going to be home charging stations, and in setting up charging stations in grocery store parking lots, entertainment venues, parking decks and the like.  

That’s because the battery packs in development are designed for frequent use. In fact, it appears that battery manufacturers are expecting it.

They aren’t going to spend time educating the consumer on how to charge the battery. They’re just expecting that the consumer will want a charging solution that’s available wherever they go. And so too is ChargePoint which has a range of solutions to address this very situation.  

When I look at it that way, I get far more bullish on CHPT stock.  

Don’t Wait on CHPT Stock 

ChargePoint doesn’t report earnings again until December 1. And spoiler alert, they aren’t going to be reporting a profit.

That is enough to keep many investors from jumping on the stock. But Will Ashworth makes a strong case for why the company’s lack of profitability shouldn’t keep you away, and I agree.

At this point, if it’s revenue you’re looking for, it’s revenue that ChargePoint is delivering.  

I’m generally a cautious investor, but I’ll admit to being intrigued by CHPT stock as a speculative bet.

I can understand why some investors are hesitant. However, this is one time where if you wait for things to be perfect, you’ll have missed the largest gains. ChargePoint may be a choppy trade for some time, but the long-term outlook is bullish.  

On the date of publication, Chris Markoch did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.  

Chris Markoch is a freelance financial copywriter who has been covering the market for seven years. He has been writing for InvestorPlace since 2019.


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