ChargePoint Holdings (NYSE:CHPT) stock has appreciated following its late May earnings release. For the optimistic investor, there is plenty positive to take from the news. The electric vehicle charging company remains a solid choice as it continues to build out future transportation infrastructure.

Given that ChargePoint bested analyst revenue expectations but failed to meet gross profit targets it would be easy to conclude that it isn’t doing well. Yet there’s a clear case to be made in favor of the charging network operator given the prevailing macro environment.

The best-case scenario is this: Give kudos ot ChargePoint for reaching $81.6 million in sales, exceeding Wall Street expectations by 7.79%. That $81.6 million in sales was higher even than the $77 million top-of-the-range guidance from analysts.

But also extend some understanding toward ChargePoint and its $12.1 million gross profit, well below the $17.3 analysts were seeking. Why? Because of the prevailing market.

Cash Raise Helps in Several Ways

Gross profit is simply revenue minus cost of revenue. Parts cost more now and are more difficult to source than they’ve been at just about any other time. So the fact that ChargePoint had to spend more to make sales is fairly easy to explain away.

The point here is that demand for ChargePoint products and services is higher than anyone expected while the gross profit miss is easily explainable. That’s very positive.

An optimistic view of ChargePoint’s April senior convertible note offering is that it helps the company in multiple ways.

One, is that the $300 million in gross proceeds simply bolsters the firm’s future efforts to grow.

Two, the conversion price of $24.03 suggests plenty of upside for ChargePoint investors at current prices.

The fact that the company was able to raise $300 million at that conversion price, slightly higher than consensus prices, indicates a bright future for the company.

Confirmed Guidance

ChargePoint also confirmed revenue guidance between $450 to $500 million for the 2023 fiscal year.

That’s strong news given that the current high estimate according to Yahoo! Finance is $499.7 million. But remember, ChargePoint exceeded revenue numbers this quarter and there’s a chance that it could do so again throughout the remainder of fiscal year 2023.

Operationally, it’s making the right moves, as yesterday’s announcement that it’s partnered with the National Electrical Contractors Association to pick up the pace in the deployment of EV charging infrastructure.

Takeaway

The most important thing to take from ChargePoint’s most recent earnings report is that its exceptionally strong revenue numbers shouldn’t be ignored. For investors willing to give it the benefit of the doubt as it relates to the cost of revenue, a clear case emerges.

Convertible note financing also speaks to the idea that CHPT stock has strong upside moving forward. CHPT stock is different than other growth stocks and its business model will prevail.

On the date of publication, Alex Sirois 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.