Plug Into the Transcontinental EV Infrastructure Market with ChargePoint

Back in the fourth quarter of 2021, when the “infra” (infrastructure) bill was in the headlines, California-headquartered electric vehicle (EV) charging equipment company ChargePoint (NYSE:CHPT) certainly looked like a strong buy. The sky was the limit for CHPT stock, it seemed.

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

The times have changed dramatically since then, however. Lately, future-forward markets like EV chargers have been abandoned in favor of safety-minded investments.

In times of geopolitical turbulence and central-bank policy changes, seeking out safe havens is understandable. Yet, investors may have treated CHPT stock too harshly in their quest for portfolio protection.

Right now, we’ll examine the technical damage and determine whether ChargePoint shares are still investable. Just as importantly, we’ll see how the company’s been doing recently – and when all is said and done, you might be surprised to learn about ChargePoint’s progress.

A Closer Look at CHPT Stock

Last year, when the overall picture was much more bullish, $30 was the established resistance level for CHPT stock. That’s because the stock reached $30 several times, but the buyers were always rejected.

It’s been said that resistance levels were meant to be broken eventually, but ChargePoint’s shareholders haven’t seen this principle in action lately. Frustratingly, the stock started 2022 at around $20 but has slid throughout the year so far.

This is a problem because ChargePoint doesn’t pay any dividends. Therefore, the investors have to rely on share-price appreciation in order to turn a profit.

As of early March, CHPT stock was trading at $14 and change, and appeared to be going nowhere fast. Can we find reasons, then, to believe that the stock will reclaim $20 and eventually $30?

Optimism Is Justified

As ChargePoint has pointed out, the total cumulative investment in EV charging infrastructure in the U.S. and Europe is anticipated to reach $60 billion by 2030, and $192 billion by 2040.

In light of this, ChargePoint should receive better treatment on Wall Street. Within a rapidly expanding addressable market, ChargePoint is making its mark and generating strong revenue.

Need proof? No problem: during the fourth fiscal quarter of 2021, ChargePoint took in $80.7 million in revenue, for a spectacular 90% year-over-year increase.

Clearly, the EV revolution is alive and well. During that same quarter, ChargePoint reported $59.2 million in networked charging systems revenue, up 109% year-over-year; as well as $17.2 million in subscription revenue, up 57% year-over-year.

Given this magnitude of top-line growth, it’s understandable if ChargePoint remains optimistic for the future. Thus, the company issued ambitious guidance of $72 million to $77 million for the first fiscal quarter ending Apr. 30, 2022.

Taking a Chance on France

Importantly, ChargePoint’s vision for the EV revolution has no geographic boundaries. Truly, this company seeks to establish an international market presence.

As evidence of this, ChargePoint has announced a joint venture with Sonepar subsidiary Sonepar France. With a network of 100 brands spanning 40 countries, Sonepar specializes in the distribution of electrical products, solutions and related services.

In the press release, it’s stated that as of Dec. 31, 2021, there were 53,667 “places to charge” (EVs, presumably) that were open to the public in France. Together, ChargePoint and Sonepar France seek to add 1,400 to that number.

Plus, in the bigger picture, the Sonepar collab should augment ChargePoint’s overall market presence over the coming year. Thus, “up to 50% of companies’ EV chargers (those sold for commercial use) will be connected with the cloud in 2025 providing users ChargePoint’s leading service.”

The Bottom Line

Of course, there’s no way to guarantee that CHPT stock will return to $30 this year, or ever.

The signs point to a recovery, however. For one thing, ChargePoint’s top-line data is unassailable and the company’s revenue guidance is optimistic.

Furthermore, ChargePoint is planting its flag on more than one continent, and thereby establishing itself as a competitive, multi-national business.

Hence, it’s reasonable to conclude that CHPT stock deserves a re-rating to the upside. $30 might or might not be in the cards, but there’s no denying ChargePoint’s stature as a champion of the vehicle electrification movement.

On the date of publication, David Moadel 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.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.


Article printed from InvestorPlace Media, https://investorplace.com/2022/03/plug-into-the-transcontinental-ev-infrastructure-market-with-chpt-stock/.

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