ChargePoint Holdings Inc

ChargePoint Holdings Inc (NYSE: CHPT) provides electric vehicle (EV) charging network in North America and the Europe region.

On 12 July 2021, the Company has scheduled its annual general meeting.

Investment Highlights – SPECULATIVE BUY at USD 28.11

• The increasing penetration of EV shall support the future growth following upbeat revenue growth in Q1 FY21.
• The Company can lead the EV industry with its capital light business model and strong balance sheet.
• During Q1 FY21, it reported GAAP net income of US$82.3 million from GAAP net loss of US$30.1 million.
• From a technical standpoint, the MACD line has crossed over the signal line, which is supporting the bullish trend.
  

Key Risks

• The Covid-19 pandemic led disruptions have impacted its vendors, customers, partners, and results of operations with significant macroeconomic uncertainty. The lengthened sales cycles, pricing pressure from the competition, and lengthened payment term can keep the growth in limit.
• The adoption rate for EV is uncertain and expected growth might not be achieved with fluctuation of results, system unavailability.

Q1 FY22 Financial Highlights (for three months ended 30 April 2021, as of 3 June 2021)

 (Source: Company website)

• During Q1 FY22, revenue surged 24% year-on-year, driven by a 36% increase in networked charging revenue.
• Total number of customers reached over 5,000, reflecting a strong recovery of commercial business.
• As of 30 April 2021, liquidity remained robust with US$609.8 million in cash.

Share Price Chart

   (Analysis done by Kalkine Group)

Conclusion

Over the past five quarters, the Company has been able to maintain its non-GAAP gross margin of over 20%, reflecting a decent operational efficiency. In Q2 FY22, the Company expects to generate US$46 - US$51 million of revenue, while FY22 revenue guidance has been reiterated for US$195 - US$205 million range. In a nutshell, the Company has demonstrated operational and financial excellence to generate significant value for shareholders in the future. The stock made a 52-week High and Low of USD 49.48 and USD 9.82, respectively. On the technical chart, the next important support level is at USD 23.89.

Based on increased EV penetration, capital light business model, revenue guidance, we have given a "SPECULATIVE BUY" stance on ChargePoint Holdings Inc at the closing market price of USD 28.11 (as of 4 June 2021).

Cassava Sciences

Cassava Sciences (NASDAQ: SAVA) is a clinical-stage biotechnology entity focusing on the treatment of Alzheimer.

Investment Rationale – WATCH at USD 64.16

• The scope of the Covid-19 pandemic is unpredictable, while the Company has a history of net losses. Therefore, the outlook seems gloomy.
• The growth trajectory is dependent upon external resources (equity issuance, debt arrangement or grants) due to significant net losses and negative cash flows.
• From a technical standpoint, Bollinger bands and 14-day RSI (76.57) is clearly giving an overbought signal. Therefore, price retracement can be expected in the short term.   

Risk Assessments

• The operational and financial impact of the Covid-19 induced restrictions, such as delay of clinical trials, and unavailability of substantial funds.
• The Company has a limited operating history and has no commercial product for commercial sale.

Recent News

Grant: On 12 May 2021, SAVA received a new US$2.7 million grant from the National Institutes of Health for financing its Phase 3 program for its drug candidate pertinent to Alzheimer’s disease.

Financial Highlights for the quarterly period ended 31 March 2021 (as on 29 April 2021)

 (Source: Company Website)

• The Company does not generate any revenue from product sales, while the net losses has been aggravated in Q1 FY21.
• The higher losses were primarily driven by costs incurred in research and development activities.
• As of 31 March 2021, the Company reported an accumulated deficit of US$178.4 million due to negative cash flows since inception and significant net losses.

Share Price Chart    

 (Analysis done by Kalkine Group)

Conclusion

As an early-stage clinical drug development entity, SAVA has no revenue-generating product and require additional funding to develop drugs and commercialize the potential candidate. Even the failure of clinical trials can worsen losses. However, we are keeping a close watch over its therapeutic product candidate Alzheimer’s disease, called simufilam. We will recommend punting on this stock once we have better clarity regarding product development and its approval for commercialization. The stock made a 52 week High and Low of USD 117.54 and USD 2.28, respectively.

Based on the uncertain outlook, macroeconomic uncertainties, and loss-making status, we have given a “WATCH” stance on Cassava Sciences at the closing price of USD 64.16 (as on 4 June 2021), while we look forward to taking fresh position when we have material fundamentals or catalyst for future profitability.

Pyxis Tankers Inc

Pyxis Tankers Inc (NASDAQ: PXS) provides marine transportation services. It is focused on product tankers that can transport refined petroleum products.

Investment Rationale – SPECULATIVE BUY at USD 0.88

• PXS has focused on deleveraging its business following the disposal of the Pyxis Delta.
• There are near term challenges, but long-term fundamentals seem promising.
• Improved demand for refined petroleum products with lockdown easing can increase consumption of transport fuels.
• From a technical standpoint, 10-day EMA (USD 0.858) is supporting the upward trend, while the 14-day RSI (52.18) giving a neutral signal.

Risk Assessments

• Depressed charter rates and less demand for tankers can impact commercial activities.
• The unavailability of low-cost bank debt can restrict new vessel ordering.

Recent News

Acquisition: On 29 April 2021, PXS announced an agreement to acquire a modern product tanker at Hyundai Mipo shipyard in South Korea.

Financial Highlights for the quarterly period ended 31 March 2021 (as on 2 June 2021)

 (Source: Company Website)

• During Q1 FY21, PXS reported a 13.6% year-on-year decrease in revenues.
• Similarly, adjusted EBITDA showed a decline of US$0.5 million over H1 FY20.
• The net loss attributable to common shareholders stood at US$2.1 million, worsened from Q1 FY20.

Share Price Chart    

 (Analysis done by Kalkine Group)

Valuation Methodology: EV/Sales Approach (FY21) (Illustrative)

Conclusion

PXS has a long-standing relationship with large customers worldwide, and it is well-positioned to capitalize on the market opportunities when the charter rate improves. It is operating at a competitive cost to its peer group with a disciplined fixed cost structure. The progression of Covid-19 vaccination could improve the charter rates, and thus, the performance of the Company. Meanwhile, recent positive trends in macroeconomic indicators shall further improve the demand. The stock made a 52 week High and Low of USD 4.60 and USD 0.7114, respectively. On the technical chart, the next important support level is at USD 0.751.

Based on the supporting long-term sector fundamentals, lockdown easing, low leverage, with support from valuation conducted above, we have given a “SPECULATIVE BUY” stance on Pyxis Tankers Inc at the closing price of USD 0.88 (as on 4 June 2021), with a lower double-digit upside potential based 1.73x EV/Sales (approx.) on FY21E Sales (approx.).

*All forecasted figures and Industry Information have been taken from REFINITIV.

*The reference data in this report has been partly sourced from REFINITIV.

*Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached or if the price closes below the support level (indicative stop-loss price).

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