ChargePoint Stock Is Still a Great Pick for Long-Term Investors

  • ChargePoint (CHPT) is benefitting from an EV boom in the U.S. that’s being spurred by high gasoline prices.
  • The company continues to grow rapidly.
  • ChargePoint’s profitability will improve going forward.
CHPT stock - ChargePoint Stock Is Still a Great Pick for Long-Term Investors

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Oil companies are not the only firms that are benefiting tremendously from high petroleum prices. The growth of America’s electric-vehicle (EV) sector is also accelerating rapidly due to the elevated gasoline prices in the country. ChargePoint (NYSE:CHPT) stock is extremely well-positioned to benefit from this situation over the long-term, making it a great pick for long-term investors.

CHPT ChargePoint Holdings, Inc. $13.09

High Gasoline Prices and U.S. EV Sales

The combination of elevated gasoline prices and the increased acceptance of EVs in America has jump-started adoption of EVs in the U.S. Another factor contributing to EV adoption is the fact that automakers with well-established reputations in America, including Ford (NYSE:F), Hyundai (OTCMKTS:HYMTF) and GM (NYSE:GM) have released multiple EV models.

In the first quarter, registrations of EVs soared 60% year-over-year in the U.S. The jump caused Car and Driver to assert that America’s “EV acceptance may have turned some important but invisible corner recently.”

Huge Demand for EV Chargers and Federal Help

In an April 2022 report, consulting firm McKinsey notes that the U.S. needs many more chargers to support President Joe Biden’s administration goals when it comes to EVs, while the Bipartisan Infrastructure Law has appropriated $7.5 billion to build an additional 500,000 chargers.

Even more encouragingly for ChargePoint, McKinsey estimates that if the administration’s 2030 goal is met, “America would require 1.2 million public EV chargers and 28 million private EV chargers by that year.” In other words, the firm believes that the demand for EV chargers will grow very rapidly over the next 7.5 years.

With more public chargers in the U.S. than any other company, a first-mover advantage in the space and $540 million of cash at the end of Q1, ChargePoint is very well-positioned to benefit both from the funds that will come from Washington to build new EV chargers and the huge demand for EV chargers that’s building.

ChargePoint’s Results Have Been Good and Will Get Better

In the first quarter, the company’s revenue soared 102% year-over-year to $81.6 million as it obtained more than 1,000 additional customers in Q1. For Q2, the company expects its revenue to jump to “$96 million to $106 million.” And for all of the current year, ChargePoint reiterated its previous revenue outlook of between $450 million and $500 million.

ChargePoint’s Q1 loss from operations was $89.8 million, well below the $46.6 million that it lost during the same period a year earlier.

But supply chain issues, which should clear up as global supply chains untangle, negatively impacted the company’s profitability. Moreover, since ChargePoint’s gross profit came in at a fairly healthy $12.1 million, as the company continues to rapidly grow, its bottom line should surge in the long-term.

In the coming months and years, the company’s rapid growth amid strong EV adoption and improving profitability should greatly boost CHPT stock.

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 Publishing Guidelines.

Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been PLUG, XOM and solar stocks. You can reach him on Stocktwits at @larryramer.

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