- ChargePoint (CHPT) stock is trading at an irrationally low price considering the company’s positive news catalysts.
- Potentially lucrative deals, along with millions of dollars’ worth of financing, support the bullish thesis for ChargePoint.
- Investors should take a moderately sized position before Wall Street fully prices in ChargePoint’s true value.
California-headquartered ChargePoint (NYSE:CHPT) is among the most ambitious competitors in the electric vehicle (EV) charging station industry. Yet CHPT stock has been weighed down by negative sentiment and should be ready for a bounce soon.
It makes no sense, really, that the investing community should abandon ChargePoint now. The White House clearly supports clean-energy initiatives, and the EV revolution will require lots of chargers for all of those electric cars and trucks.
But if Wall Street is behaving irrationally, that’s your opportunity to pounce on CHPT stock. Investors should come back to their senses soon enough, and the idea is to get in the trade before that happens.
Meanwhile, there’s some encouraging news to consider when it comes to ChargePoint. If multi-million-dollar financing doesn’t get you charged up, maybe a tie-up with a banking behemoth will do the trick.
| CHPT | ChargePoint | $13.88 |
What’s Happening With CHPT Stock?
First, let’s consider where CHPT stock stands now. It’s certainly closer to the 52-week low of $11.21 than the 52-week high of $36.86.
If you’ve been sitting on the sidelines, you’re definitely in luck. The ChargePoint share price could double from here before it even breaks out of its range from the past 12 months.
Even beyond the technical considerations, informed investors should find it tempting to grab a few shares of CHPT stock now. The company just augmented its capital position to the tune of hundreds of millions of dollars.
More specifically, ChargePoint recently announced the closing of approximately $300 million of financing (prior to deducting fees and
estimated offering expenses). This financing took place “through the purchase of convertible senior notes… to support ChargePoint’s growth initiatives.”
The term “growth initiatives” is frustrating vague, but it leaves open so many possibilities. Perhaps the funds could be allocated toward research and development or expanding ChargePoint’s already vast EV charging station network.
It’s astounding to consider that ChargePoint has delivered more than 110 million charging sessions and just keeps on growing as a company. It’s exciting to think about how ChargePoint could deploy the $300 million and build its business even further.
Reducing the Barrier to Entry
Plenty of well-known businesses have dived head-first into the EV movement. Would you expect old financial giant Goldman Sachs (NYSE:GS) to be part of this modern revolution, though?
Sometimes, Wall Street can be full of surprises. Believe it or not, Goldman Sachs (or at least, part of that company) is reportedly teaming up with ChargePoint to make EV charging more financially feasible for some customers.
Let’s start with a bit of clarification. Goldman Sachs Asset Management is the primary investing area within Goldman Sachs. And Goldman Sachs Asset Management has an affiliate called Goldman Sachs Renewable Power.
Goldman Sachs Renewable Power seems to be primarily focused on solar and storage projects. So while a Goldman Sachs-ChargePoint team-up might be surprising, it makes perfect sense that Goldman Sachs Renewable Power is helping ChargePoint to introduce “new tailored financing solutions as part of the ChargePoint as a Service… product family to reduce upfront costs of EV charging technology for eligible customers.”
Some customers may even be able to deploy EV charging for free. According to the press release, “the turnkey option enables customers offering public charging to host a station at zero cost to them. This partnership will enable customers to implement a superior EV charging solution at no capital expense.”
Now, if a zero-cost solution doesn’t bring more EV-reluctant customers into the fold, I can’t imagine what would.
What You Can Do Now With CHPT Stock
So, it looks like ChargePoint is working with an arm of an arm of a really big bank. That’s a little bit complicated, but it should translate to progress in building out ChargePoint’s EV charging station network.
Moreover, roughly $300 million in financing will certainly help ChargePoint further its various objectives. Consequently, investors shouldn’t hesitate to take a long position in CHPT stock while it’s still near the bottom of its price range.
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.
