ChargePoint stock price analysis: CHPT could pop by 40%

on May 31, 2023
  • ChargePoint share price has formed a double-top pattern at $8.10.
  • The company received an update by Bank of America analyst.
  • It will publish their financial results on Thursday this year.

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ChargePoint (NYSE: CHPT) stock price is in the spotlight this week as the company publishes its quarterly results. The stock popped to a high of $9.75, the highest level since April 5, ~25% above the lowest level this year. Still, it remains about 51% below the highest level in 2022.

ChargePoint earnings preview

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ChargePoint is the biggest companies in the electric vehicle charging industry. The company has over 19,000 fast-charging ports in the United States. It does this by selling networked charging hardware that are connected through the cloud.

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The growth of electric vehicles has been a good thing for ChargePoint. Its annual revenue jumped from $58.5 million in 2018 to over $448 million in 2022. But as expected, the company’s losses have also jumped from about $75.5 million to over $345 million.

The losses part is understandable since rolling out a network of charging infrastructure across the country is expensive. The company hopes that these losses will narrow down in the coming years as it starts to slow its investments.

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Analysts believe that the company has two more years in the red. They believe that the total loss will be 49 cents per share this year followed by 16 cents in 2025. The company is expected to make a profit of 14 cents in 2026 when its profit will hit $1.45 billion.

ChargePoint stock price will react to the upcoming earnings scheduled for Thursday. Analysts expect that its revenue came in at $128.36 million while its GAAP loss was at 23 cents per share. In its previous earnings report, the ChargePoint stock price plunged by over 20% after its results missed expectations. It also issued a weak forward guidance, as I wrote here. In a note, an analyst at Bank of America said:

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“The company is well positioned to capitalize on industry and regulatory tailwinds given their premium asset-light business-to-business model, and strong North American market share. The thesis is based on an inflection to cash flow breakeven reducing the reliance on expensive capital markets as the company builds out its network.”

ChargePoint stock price forecast

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The daily chart shows that the CHPT stock price has been in a strong bearish trend in the past few years. A look at the shares has formed a double-bottom pattern at $8.10. In price action analysis, this pattern is usually a bullish sign.

Therefore, the stock will likely continue soaring as buyers target the neckline at $13.50, which is about 40% above the current level. A move below the year-to-date low of $7.83 will invalidate the bullish view.

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