ChargePoint Stock Powers Up After Q3 Earnings Results: Wall Street And Retail Aligned In Cheer

Shares of ChargePoint Holdings Inc. surged more than 10% in pre-market trading on Thursday, reaching levels last seen a month ago, as the electric-vehicle charging company posted better-than-expected third-quarter results. 

The company reported a narrower net loss of $77.6 million, significantly better than the $158.2 million loss reported in the same quarter last year.

ChargePoint’s revenue for the quarter was $99.6 million, down 10% from $110.3 million a year ago but exceeding the consensus estimate of $89.58 million. Subscription revenue rose 19% to $36.4 million. 

Despite these positives, the adjusted loss of $0.18 per share came in wider than the expected $0.09 per share loss.

The company maintained a cautious outlook for the fourth quarter, forecasting revenue between $95 million and $105 million, in line with the consensus estimate of $101.02 million. 

"We are encouraged by record EV sales in the industry, and we continue to see network utilization driving the need for more charging infrastructure," said Rick Wilmer, CEO of ChargePoint. 

"Our third-quarter results exceeded our expectations, and demonstrate that our strategy, focus on operational excellence, and rigorous cash management are translating to tangible results."

CHPT sentiment and message volume Dec 5 pre-market as of 7:45 am ET | source: Stocktwits

On Stocktwits, retail sentiment for ChargePoint flipped from ‘bearish’ to ‘extremely bullish’ early on Thursday as message volume surged. 

Some users speculated that the results could lead to analyst upgrades, while others expressed optimism about the stock’s long-term prospects, with one commenter predicting it could hit $10 by the end of 2025.

The broader EV market saw record growth in the third quarter, with 346,408 EVs sold in the U.S., representing an 11% increase from a year earlier and 8.9% of all car sales, according to automotive research firm Kelley Blue Book. 

Incentives, bolstered by the Inflation Reduction Act of 2022, played a key role in boosting EV adoption, with discounts making up 12% of the average EV transaction price compared to 7% for new cars overall. 

However, the growth rate in EV sales has slowed, and President-elect Donald Trump’s pledge to dismantle policies supporting EV adoption has introduced uncertainty into the sector. 

A study for the National Bureau of Economic Research by Duke University researchers estimated that eliminating federal EV tax credits could reduce U.S. EV sales by as much as 27%.

Last month, Needham downgraded ChargePoint to ‘Hold’ from ‘Buy’, citing concerns over the company’s slower revenue growth and the delay in achieving adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) profitability. 

The brokerage also noted that uncertainty around EV policy under the incoming administration could delay sector tailwinds.

ChargePoint’s stock remains down over 43% year-to-date, reflecting the broader challenges faced by the EV industry despite the company’s recent progress.

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