For
ChargePoint,
modern history is repeating itself.
The electric-vehicle charging company reported better-than-expected sales and earnings, but the stock still fell. Then, shares turned higher.
This down-up reaction happened only a few months ago.
Late Thursday, ChargePoint reported a fiscal first-quarter per-share loss of 15 cents from $130 million in sales. Wall Street was looking for a 19 -cent loss from $128 million in sales.
Shares were off 3.9% in Friday’s premarket trading after being down 6% in Thursday’s after-hours trading. By midmorning, they were up about 1.1%, at $9.86. The
S&P 500
and
Nasdaq Composite
were up about 0.6% and 0.3%, respectively.
Sales guidance for the coming quarter was probably the reason for the early drop. For the current quarter, ChargePoint expects sales of between $148 million and $158 million. The $153 million midpoint is below Wall Street’s projection of $166 million.
Guidance is for fiscal 2024’s second quarter. ChargePoint’s fiscal year ends in January.
At $153 million, sales would be up about 46% year over year. Sales grew almost 60% year over year in the quarter just reported. Growth was good, but the mix of Wall Street and investor expectations, plus guidance dragged down the stock.
A similar dynamic unfolded when ChargePoint reported year-end numbers on March 2. The company projected about $127 million in first-quarter sales. Wall Street projected $140 million. On March 3, the stock opened down almost 12%.
Things turned around, though. On March 3, shares rallied, closing down less than 2%, at $11.08. The same pattern was happening Friday, except shares rallied all the way into the green.
Evercore ISI analyst James West is happy with the quarter, pointing out in a Friday report that ChargePoint’s gross profit margins are improving. Adjusted gross profit margins came in at 25% for the first quarter, compared with 23% for the fourth quarter.
“ChargePoint also recently surpassed for the first time an annualized subscription revenue benchmark of $100 million,” he wrote. “The long tail of consistent software sales should garner a superior [valuation] multiple as well.”
West rates shares Buy and has a $20 price target. Overall, 77% of analysts covering the stock rate shares Buy. The average Buy-rating ratio for stocks in the S&P 500 is 53%. The average analyst price target is $16 a share.
Coming into Friday trading, ChargePoint stock was down 30% over the past 12 months. The S&P 500 was up about 1% over the same span. Rising interest rates and a slowing economy have sapped some investor enthusiasm for companies that don’t produce consistent profits.
Wall Street projects full-year profitability for ChargePoint by calendar year 2025.
Write to Al Root at [email protected]
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