Alex Vrabel, an analyst from Bank of America Securities, maintained the Hold rating on ChargePoint Holdings (CHPT – Research Report). The associated price target is $2.50.
Alex Vrabel has given his Hold rating due to a combination of factors impacting ChargePoint Holdings (CHPT). The company’s recent guidance cut, which followed the delays in fleet and commercial electric vehicle (EV) deliveries, is a significant concern. This has notably affected ChargePoint’s contracts with “last-mile” fleet operators and distributors, such as the United States Postal Service, which is a key customer through CHPT’s distribution partner Rexel. The weak preliminary results for the third fiscal quarter appear to stem from specific issues rather than widespread problems, yet the lack of clarity on backlog and order trends, in conjunction with the current macroeconomic uncertainty, prompts caution in the assessment.
Moreover, the trend of consumers opting for used EVs over new ones, with the exception of certain Tesla models, poses a headwind to the deployment of new charging stations, which is essential for ChargePoint’s growth. While CHPT retains a leading market share in Level 2 charging and has a broad customer reach, the entire industry is facing pressure, and scale becomes increasingly important to navigate the uncertain macro environment. With ChargePoint targeting positive EBITDA by the fourth quarter of 2024 and new management in place, there are several operational factors to consider. The path to achieving this goal amidst mixed market signals and the necessity of reducing operating expenses make it challenging to provide a more optimistic rating at this time, hence the Neutral stance.
In another report released on November 27, UBS also downgraded the stock to a Hold with a $2.25 price target.
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ChargePoint Holdings (CHPT) Company Description:
ChargePoint Holdings (NYSE:CHPT) is an EV (electric vehicle) infrastructure company that develops and markets EV charging systems. It provides networked charging systems and cloud-based software and services to residential and commercial customers and fleet operators.
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