News

ChargePoint Holdings Q4 Results

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4.4

Andrew R. Michaud

• March 06, 2024

ChargePoint Holdings, an electric-vehicle-charging company, recently reported mixed fiscal fourth-quarter numbers along with an optimistic outlook for the upcoming year. However, despite positive guidance, shares experienced a decline in early trading due to investors adopting a "show-me" attitude towards ChargePoint stock.

Fiscal Fourth Quarter Performance

In the fourth quarter, ChargePoint announced adjusted negative earnings before interest, taxes, depreciation, and amortization (Ebitda) of $45.3 million on sales totaling $115.8 million. This financial performance slightly deviated from Wall Street's expectations of negative Ebitda of $48 million on sales of $120 million, as reported by FactSet. Comparatively, the previous year saw ChargePoint report negative Ebitda of $42.1 million on sales of $152.8 million.

Challenges and Outlook

One of the major challenges faced by ChargePoint has been a decline in sales, contributing to an 81% drop in shares over the past year leading up to Wednesday's trading session. Looking forward, management anticipates first-quarter sales to range between $100 million and $105 million, falling short of Wall Street's approximate estimate of $109 million.

Future Projections

Despite these challenges, ChargePoint remains positive about its future prospects, particularly forecasting positive Ebitda for the fiscal fourth quarter in January 2025. This projection contrasts with Wall Street's expectation of negative Ebitda amounting to $22 million.

ChargePoint's ability to navigate through these trials and deliver on its anticipated results will be closely watched by investors in the upcoming quarters.

Insights on ChargePoint Stock

Despite better than expected guidance, ChargePoint stock experienced a decline of about 3.5% in premarket trading. In contrast, S&P 500 and Nasdaq Composite futures were up 0.4% and 0.7%, respectively.

Investor Expectations

Investors are eagerly waiting for ChargePoint to demonstrate positive Ebitda before granting the company due recognition. Following recent declines, investors are seeking tangible results before reevaluating their stance.

Analyst Perspective

Benchmark analyst Mickey Legg remains optimistic about ChargePoint's long-term strategy to achieve adjusted Ebitda positivity by the end of the calendar year. With improved gross margins and reduced cash usage, the company holds $358 million in cash and an undrawn $150 million revolving credit facility, ensuring ample runway for growth. Wall Street projects ChargePoint to use around $90 million in fiscal year 2025.

Analyst Recommendations

Legg maintains a Buy rating for ChargePoint shares with a price target of $4.25, exceeding the average analyst target of approximately $3.30. Presently, 32% of analysts covering ChargePoint stock have assigned Buy ratings, compared to an average Buy-rating ratio of about 55% for S&P 500 stocks.