Shares of ChargePoint (NYSE:CHPT) fell 30% in after-hours trading yesterday on news of CEO rejig and cautionary sales forecast. The leader in electric vehicle (EV) charging systems announced the departure of Pasquale Romano from the CEO role and the appointment of Rick Wilmer as the company’s new CEO, effective November 16.
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Wilmer will join ChargePoint’s Board, and Romano will continue as an advisor to ensure a seamless transition. Also, the company named Mansi Khetani as the interim CFO, replacing outgoing CFO Rex Jackson, effective immediately.
CHPT Warns of Missing Sales Expectations
The company warned that it will miss Q3 sales expectations owing to a slowdown in sales in its core markets of North America and Europe. Moreover, “fleet- and commercial-vehicle delivery delays” impacted the deployments to the government, auto dealers, and customers.
The company’s revised preliminary forecast shows that Q3 revenue will now fall between $108 million to $113 million, meaningfully lower than its prior estimates of between $150 million to $165 million. The consensus for the same is pegged at $157.17 million. The final third-quarter results are scheduled for December 6, after the market closes.
Also, CHPT will incur a non-cash impairment charge of $42 million in the quarter, which will negatively impact its gross margins.
Is ChargePoint a Buy, Sell, or Hold?
Following the company news, TD Cowen analyst Gabriel Daoud reiterated a Buy rating on CHPT stock and set a price target of $3 (4.2% downside potential). Daoud remains optimistic about CHPT since it still holds a substantial market share despite the challenges in the EV charging sector. Plus, he is encouraged by the management’s forward strategy and the top executive rejig that will help the company meet its long-term goals.
Overall, CHPT has a Strong Buy consensus rating on TipRanks. This is based on 13 Buys and three Hold ratings, most of which were given before the company’s news. The average ChargePoint price forecast of $9.78 implies 212.5% upside potential from current levels. Year-to-date, CHPT stock has lost 65.6%.
