Emerging electric vehicle (EV) charging network provider ChargePoint Holdings (CHPT) could make its stock investors happy again as it reports third-quarter earnings results for the Fiscal Year 2022 tomorrow after the market close.
Following a blow-out second-quarter where quarterly sales grew by a strong 61% year-over-year, CHPT stock investors may expect more fireworks in the upcoming quarterly report.
ChargePoint Holdings is building a technologically advanced vast network of EV charging stations in North America and Europe, targeting fleets of all types and sizes. I am neutral on the stock. (See Analysts’ Top Stocks on TipRanks)
What to Expect in ChargePoint Holdings’ Q3 Earnings Results
ChargePoint Holdings is expected to release its earnings for the three months ended on October 31, 2021, on December 7, 2021.
The company provided revenue guidance for $60-65 million on September 1, 2021, indicating a potential year-over-year growth rate of 64.8% to 78.5% for the quarter. It also raised its full-year revenue guidance for Fiscal Year 2022 from a previous range of $195-205 million to $225-235 million for the twelve months ending January 31, 2022. Good things are seemingly happening at ChargePoint.
That said, Wall Street analysts remain divided on the company’s growth trajectory. Revenue estimates for the quarter ending October range widely from $61 million to over $80 million. Perhaps they are still reading into the business and gaining deeper informed insights.
The consensus analyst earnings estimate for Q3 2022 is a loss of $0.12 per diluted share, which could show a significant improvement from a comparable $3.43 loss per share reported for the same quarter last year.
See ChargePoint Holdings’ Earnings History on TipRanks >>
What’s Driving ChargePoint’s Strong Revenue Growth?
Strong organic growth, acquisitions, and strategic partnerships continue to power impressive top-line growth rates for ChargePoint Holdings.
Revenue growth is expected to accelerate during the fourth quarter as the company completes the integration of has·to·be, a recently acquired European e-mobility technology provider, this quarter.
In June, ChargePoint also announced a partnership with Mercedes-Benz USA for a “me Charge” charging solution. A recently consolidated acquisition, ViriCiti contributed to revenue growth for most of the third quarter.
Most noteworthy, ChargePoint is enjoying strong growth as EV penetration rates continue to surge in Europe and North America.
The company’s activated charging ports reached the 118,000 mark in July, and this number will grow following the integration of newly acquired leading European charge-point platform business has·to·be.
Most noteworthy was management’s comment in response to analysts’ questions during an earnings call in September that emphasized the company’s accelerating organic sales growth.
Analysts are Bullish on CHPT Stock Outlook
In the September earnings call, Five-Star Wall Street analyst Colin Rusch from Oppenheimer asked a probing question about organic growth in customer count. In response to this question, ChargePoint Holdings’s Chief Financial Officer Rex Jackson was proud to highlight that the company has been beating its prior 500 new customers per quarter organic growth run-rate lately.
Colin Rusch reiterated his Buy rating on CHPT stock four months ago and maintains a $39 per share price target on the stock, indicating a potential 81% upside from its current valuation.
Another highly rated Wall Street analyst with Roth Capital, Craig Irwin, reiterated his Buy rating on CHPT stock in September, and his $46 price target indicates 113.2% upside.
Analyst David Kelly of Jefferies, who has a good 68% success rate on his calls, remained upbeat on the company’s longer-term sales ramp and cost leverage in a September update. However, he lowered his price target on ChargePoint Holdings stock from $40 to $36, reflecting a higher discount rate to his projections.
David lowered his price target on CHPT stock again on December 3 to $34 a share.
Wall Street’s Take
Turning to Wall Street, ChargePoint Holdings stock earns a Moderate Buy rating based on four Buys and five Holds assigned in the past three months.
The average Chargepoint Holdings price target of $29.11 implies 35% upside potential.
Disclosure: At the time of publication, Brian Paradza did not have a position in any of the securities mentioned in this article.
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