There is no denying the fact that the IRA act, which has several provisions of tax credits and rebates, could be a major game changer for EV and EV infrastructure companies. Considering this, in this article, we have chosen two stocks from the EV infrastructure space, ChargePoint Holdings (NYSE:CHPT) and Volta (NYSE:VLTA), to understand which stock could be a better buy for your investment portfolio.
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Now, with the help of the TipRanks Stock Comparison tool, let’s compare Chargepoint and Voltas and see which one offers a better risk/return profile.
ChargePoint Holdings (CHPT)
Headquartered in California, ChargePoint Holdings is an EV infrastructure company that develops and markets EV charging systems. It provides EV charging networks and cloud-based software, hardware and services to residential and commercial customers and fleet operators.
Recently, ChargePoint joined hands with digital ad companies Ara Labs Inc. and Destination Media Inc. to build an advertising network, utilizing its EV charging stations, across the U.S. Supported by the EV revolution, this move is expected to create an additional revenue stream for the company in the coming years.
The stock has rallied 13% over the past week. Despite the recent rally, the stock is still 16% lower than its year-ago level.
On August 30, ChargePoint reported mixed Q2 results. Though earnings per share (EPS) missed analysts’ expectations, revenues remained impressive, crossing the $100 million milestone for the first time in Q2.
Driven by higher demand and pricing, revenues grew 93% year-over-year. What was more reassuring to investors was the reiterated Fiscal 2023 guidance.
What Is the Prediction for ChargePoint Stock?
ChargePoint Holdings’ average price prediction of $24.06 reflects 36.09% upside potential. On September 7, Maheep Mandloi from Credit Suisse initiated coverage on ChargePoint with a Buy rating and a price target of $22 (24.43% upside potential).
Mandloi is bullish on ChargePoint and believes that the stock presents a 50% upside. The analyst states that ChargePoint “has activated over 180,000 ports across the US, representing a market share of more than 48%.”
As a result, he believes the company has a clear-cut “first-mover advantage” in the growing EV space and will also gain from its “capital-light” growth model. He expects ChargePoint to capture over 50% market share and bolster its sales and leadership position through potential acquisitions.
Overall, the Wall Street community has a Strong Buy consensus rating on CHPT, which is based on eight Buys and one Hold.
Volta (VLTA)
Volta Industries is an electric vehicle infrastructure company that develops electric vehicle charging stations. Its charging networks are free for EV owners. Volta earns its profits from retailers who pay for advertisements that are displayed on its charging stations. Volta places its stations in areas with high consumer traffic, such as hospitals and grocery stores, thereby giving maximum exposure to its advertisers.
Volta stock has lost over 80% of its market capitalization over the past year. Unlike ChargePoint, Voltas has not gained any momentum following the IRA act.
Last month, the company reported unimpressive Fiscal Q2 results, with continued losses despite growing revenues that more than doubled during the quarter.
Further, it continues to struggle with its concerning cash position and top management issues as it is led by an interim CEO and is on the lookout for a new CFO.
Are Volta’s Shares Good to Buy?
Currently, analysts on TipRanks are cautious but optimistic about VLTA. Based on two Buys and three Holds, VLTA stock carries a Moderate Buy consensus rating. Voltas’ average price forecast of $4.10 offers upside potential of 93.40% from the current levels.
Concluding Thoughts
The ever-growing investments in the EV space across the globe will surely act as a positive catalyst for EV stocks. Amid the EV evolution, stocks like CHPT and VLTA will likely see robust revenues and earnings growth over the coming years.
However, of the two stocks discussed above, we believe that ChargePoint could be a better investment option because of its market-leading position and better underlying fundamentals.
