After market close today, ChargePoint (CHPT) released its Fiscal Q2-2023 earnings results. While earnings per share (EPS) missed analysts’ expectations, revenue came in stronger than expected. The company also reaffirmed its guidance for the rest of the year. As a result, the stock is trending higher in the after-hours session.
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ChargePoint’s revenue of $108 million grew 93% on a year-over-year basis, beating the consensus estimate of $103 million. This significant increase was driven by a 106% jump in networked charging systems revenue and a 68% increase in subscription revenue. CHPT’s earnings per share came in at -$0.28, missing the -$0.22 estimate, and its Q2 GAAP loss was $92.7 million, worse than the $84.9 million loss in the same quarter last year.
In addition, ChargePoint’s gross profit margin increased by 200 basis points on a quarter-over-quarter basis but dropped by the same amount on a year-over-year basis, reaching 17%. The company ended the quarter with $471.9 million in cash & cash equivalents and $294.3 million in long-term debt.
ChargePoint Provides Q3 Guidance, Reaffirms Fiscal 2023 Outlook
What probably pleased investors, besides the revenue beat, was CHPT’s guidance. For Q3 (ending October 31, 2022), CHPT is projecting revenue of $125 million to $135 million, implying 100% year-over-year growth at the midpoint. For Fiscal 2023, revenue is expected to be between $450 million and $500 million, which would represent a 96% growth rate.
The company also expects its non-GAAP gross margin to come in at 22% to 26%. In the most recent quarter, Chargepoint’s non-GAAP gross margin was 19%; therefore, the company expects improvements on this front.
Importantly, CHPT anticipates that its Fiscal 2023 operating expenses will increase by 50%. While this may seem bad, they will be increasing slower than revenue, which should help with profitability.
What is the Price Target for CHPT Stock?
Turning to Wall Street, Chargepoint stock earns a Moderate Buy consensus rating based on seven Buys and four Holds assigned in the past three months. The average CHPT stock price prediction of $18.91 implies 30.5% upside potential.
Top TipRanks Investors are Neutral on CHPT Stock
TipRanks currently tracks 729,068 investor portfolios that use the Smart Portfolio tool. The top investors, which amount to 145,813 portfolios, appear neutral on CHPT stock.
In the past 30 days, the number of top-performing TipRanks portfolios holding CHPT increased by just 1.4%, leading to 2% of portfolios holding the stock. However, in the past seven days, this number decreased by 0.5%. ChargePoint’s neutral-to-slightly-negative investor sentiment is still above the sector average, as shown in the image below:
Conclusion: ChargePoint’s Mixed Q2 Results Were Enough to Satisfy Investors
While ChargePoint missed its Q2-EPS estimates, it made up for it by beating revenue expectations and reaffirming its full-year guidance. This caused the stock to rally slightly in the after-hours trading session. Nonetheless, CHPT is still a high-growth, money-losing company that is entering a tough economic period. Therefore, the risks are high. Still, it has the backing of analysts, who are cautiously optimistic about the stock.
