Shares of EV charging equipment maker
ChargePoint
are dropping after disappointing quarterly earnings. There is sales growth at the company, but just not enough for investors.
On Wednesday evening, ChargePoint (ticker: CHPT) reported a per-share loss of 24 cents from $150.5 million in sales. A year ago, ChargePoint reported a 19-cent loss from $108.3 million in sales.
“In the second quarter, ChargePoint delivered solid growth. Our revenue of $150 million represents a 39% year-over-year increase despite a hesitant economy,” said CEO Pasquale “Pat” Romano in a news release.
Solid expansion, but below what Wall Street was expecting. Analysts were looking for a 13-cent loss from $153.2 million in sales.
Guidance is below the Street consensus, too. Looking ahead, ChargePoint expects to generate between $150 million and $165 million in third-quarter sales. Wall Street is projecting about $178 million. For the full year, the company expects sales to come in between $605 million and $630 million. Wall Street is projecting about $667 million.
Shares are down 10.6% in premarket trading at $6.31, while S&P 500 and Nasdaq Composite futures are down 0.3% and 0.6%, respectively.
“While we expected near-term headwinds….ChargePoint’s [guides] were below our revised expectations,” wrote
J.P. Morgan
analyst Bill Peterson in a Thursday report. “Growth is still being held back by reduced discretionary spend in some markets with fleet growth also being held back by lack of vehicle availability.”
He still rates the shares Buy, calling ChargePoint a leader in North American EV charging, but took his price target to $10 from $13.
Stifel
analyst Stephen Gengaro rates the shares Buy too. He maintained his price target at $17.
“The lower guidance is due to near-term macro headwinds, and while we remain confident in ChargePoint’s business strategy, we expect the shares will be weak following the results and outlook,” wrote Gengaro on Wednesday evening. “On a positive note, the longer-term story appears intact.”
He pointed to management’s plan to generate positive adjusted earnings before interest, taxes, depreciation, and amortization, or Ebitda, by the fourth quarter of calendar 2024, a little over one year from now, as a sign the overall business is OK.
As of July 31, 2023, the company has $263.9 million in cash on the books. Wall Streets projects ChargePoint will use about $110 million building its business in the final two quarters of the company’s fiscal 2024 year, ChargePoint’s fiscal year ends in January, and about $170 million in the coming fiscal year 2025.
Coming into Thursday trading, ChargePoint stock is down about 26% since Jan. 1 and 56% over the past 12 months. Rising interest rates and a slowing economy have sapped some investor enthusiasm for shares of startup companies.
Write to Al Root at [email protected]
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