ChargePoint Holdings, Inc.

ChargePoint Holdings, Inc. (NYSE: CHPT), is focused solely on offering the best electric vehicle (EV) charging experience for everyone involved in the shift to electric mobility.

Key highlights

• Robust industry outlook: The Company’s growth is directly proportional to EV penetration. Many governments are taking various initiatives, such as fossil fuel bans, incentive programs, to boost EV demand. Furthermore, all major auto companies are shifting their focus on EV. Hence, the demand for the charging points would be increasing.         

Source: Company

• Strong growth and long-term profitability: The accelerating adoption of electric vehicles represents an enormous opportunity for EV infrastructure providers. The company expects to grow its revenue to USD 2,069 million by FY2026, with a CAGR of 60% from 2021 to 2026. Furthermore, the company also expect to clock an Adjusted EBITDA of USD 340 million for the same period.

Source: Company

Financial Overview

Source: Company

• During the quarter, the company spent USD 762.7K on general and administrative expenses and incurred franchise tax expenses of USD 50K.
• For the quarter, the company incurred a net loss of USD 792.9K.
• At the end of September quarter, the company had total cash of USD 11.4k and total assets of USD 317.2 million.

Risks associated with investment

The global spread of the novel coronavirus (Covid-19) has created significant volatility, uncertainty and economic disruption. There are many other factors which could impact the operations and financials of the company such as customers’ ability to pay for the company’s EV charging equipment and related service, high completion, the impact of business disruption would lead to negative impact on demand for the company’s EV charging equipment and related services, etc.

Stock recommendation

The accelerating adoption of electric vehicles represents an enormous opportunity for the Company. They are also growing their customer base, reflecting ongoing software and warranty subscriptions, and increased hardware purchases. However, with limited information available, the recent reverse merger with Switchback Energy and upcoming financial results on March 11, 2021, we would like to see how the results pan out. Hence, we prefer to remain on the side-line. Therefore, we recommend an "Avoid" rating on the stock at the closing price of USD 28.50 as on March 2, 2021.

Source: Refinitiv (Thomson Reuters)

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