The electric vehicle (EV) revolution continues to gather momentum, and ChargePoint (NYSE:CHPT) has signed impressive new partnership deals. What’s more, the valuation of CHPT stock has become much more attractive and the company is still growing very rapidly. Given these points, I recommend long-term investors buy the company’s shares.
In the U.S., EV sales nearly doubled last quarter versus the same period a year earlier. Electric vehicles constituted a record 5% of all vehicles sold.
Importantly for ChargePoint, although 75% of all EVs sold in the U.S. in Q1 were made by Tesla (NASDAQ:TSLA), other companies are starting to gain meaningful footholds in the sector. For example, Ford (NYSE:F) sold nearly 7,000 of its Mustang Mach Es.
Meanwhile, just last month, Hyundai (OTCMKTS:HYMTF) sold nearly 11,500 battery EVs, more than doubling its total from March 2021. And many new EV brands, including multiple pickups and luxury SUVs, are right around the corner.
Since Tesla provides charging services for consumers who buy its EVs, the increased popularity of electric vehicles made by companies other than Tesla bodes well for CHPT stock.
In Europe, where ChargePoint has a significant presence, sales of plug-in vehicles (EVs and plug-in hybrids) increased 38% year-over-year to almost 160,000 in February. The latter total represented a market share of nearly 20%. Among all plug-in brands, Tesla was only ninth in Europe in the first two months of the year with a 5.4% share of the plug-in market.
When it comes to partnerships, ChargePoint recently signed deals with several companies, including Goldman Sachs (NYSE:GS) and Volvo (OTCMKTS:VLVLY). It also partnered with Toyota (NYSE:TM), the world’s leading automaker by sales. Those are some very heavy hitters.
On the valuation front, CHPT stock has tumbled 26% in the last month. As a result, its price-to-sales (P/S) ratio has dipped to 18.1x. That sounds high. But given the company’s very rapid growth and its positioning at the epicenter of a revolution that’s gathering speed, I believe the shares are reasonably valued.
As I’ve previously noted, in Q1, ChargePoint’s “sales soared 90% year-over-year to $81 million. And for the company’s current fiscal year, ChargePoint expects to report revenue of $450 million to $500 million. In other words, the firm expects its revenue to double, give or take, during its current fiscal year.”
CHPT stock continues to provide investors with a good way to play the explosion of EV sales, and long-term growth investors should buy the shares.
On the date of publication, Larry Ramer 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.