Can ChargePoint (CHPT) stock power your portfolio as EV space blooms?

Highlights

  • ChargePoint Holdings Inc (NYSE:CHPT, CHPT:US) stock surged by nearly three per cent on Friday, September 17.
  • ChargePoint’s revenue catapulted by 61 per cent year-over-year (YoY) to US$ 56.1 million in Q2 FY22.
  • With the US and Canada making notable investments in expanding their EV charging networks, companies like ChargePoint are likely to benefit majorly.

ChargePoint Holdings Inc (NYSE:CHPT, CHPT:US) appears to be an electric vehicle (EV) stock that is pulling the attention of quite a few investors in Canada and the US, making it one of top trends.

The EV stock surged by nearly three per cent on Friday, September 17, before closing at a value of US$ 21.3 and a market cap of US$ 6.87 billion.

Unlike EV automobile manufactures like Tesla Inc (NASDAQ:TSLA, TSLA:US) and General Motors (NYSE:GM:GM:US), ChargePoint is a provider of charging networks for electric cars. Based in Campbell, California, the enterprise comes with a cloud subscription platform and software-defined charging hardware that are constructed with the aim to include various charging.

Let’s have a closer look at ChargePoint’s stock and financial performance to gauge where it stands in the EV space.

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 Is ChargePoint Holdings Inc (NYSE:CHPT, CHPT:US) a buy stock?

Stocks of ChargePoint Holdings inflated by nearly 50 per cent in the past one year. However, its year-to-date (YTD) levels noted a dip of nearly 47 per cent.

ChargePoint’s valuation metrics, meanwhile, post a negative price-to-earnings (P/E) ratio of -19 and a debt-to-equity (D/E) ratio of 0.05.

While its recent stock performance may not encourage in, its Q2 FY22 quarterly results point towards an increase in sales and operations.

In its second fiscal quarter that ended July 31, 2021, ChargePoint’s revenue catapulted by 61 per cent year-over-year (YoY) to US$ 56.1 million. Its number of activated ports, on the other hand, surged past 118,000 (as of July 31).

ChargePoint Holdings Inc (NYSE:CHPT, CHPT:US) Q2 FY22 results

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There is something else in its latest earnings report that one should take note of.

ChargePoint has expanded its full-year revenue guidance by as much as 15 per cent to a range of US$ 225 to US$ 235 million. Notably, this expansion of its revenue outlook comes in the wake of the US and Canada’s proposed carbon emissions policies.

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In its home country, President Joe Biden’s recently Senate-passed bipartisan infrastructure bill proposes an investment of US$ 7.5 billion to construct “a national network of EV chargers”, which would be the country’s “first-ever national investment in EV charging”.

Canada, on the other hand, has the C$ 280 million Zero Emission Vehicle Infrastructure Program (ZEVIP) in place that is set to look into the lack of EV charging and refueling stations in the country.

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So, what’s in store for ChargePoint?

With the US and Canada making notable investments in expanding their EV charging networks, companies like ChargePoint are likely to benefit majorly.

Another point to take note of is that ChargePoint’s growth is not directly dependent on which brand of EVs is popular, but on the general rise of EV adoption. In other words, no matter which EV you drive, it will still need to be charged.

With the rising popularity of EVs amid governments’ drive to bring about green economies and lower battery costs, the electric vehicle industry is likely to grow significantly in the future.

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