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Why ChargePoint Stock Soared Today

By Howard Smith – Sep 2, 2021 at 2:58PM

Key Points

  • Many companies going public through SPAC mergers have disappointed, so boosted guidance from ChargePoint was welcomed by investors.

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The charging network provider gave investors what they wanted to hear this quarter.

What happened

Electric vehicle charging network company ChargePoint Holdings (CHPT 0.79%) reported its fiscal 2022 second-quarter results last night, and investors cheered the news. The company's shares jumped 12% early Thursday, and though trimming some of those gains, remained up 8.3% as of 2 p.m. EDT. 

So what

ChargePoint is one of several companies that recently went public through a merger with a special purpose acquisition company (SPAC) projecting significant growth in its business. Investors jumped in trying to get a piece of the rapidly growing electric vehicle sector. Prior to going public earlier this year, ChargePoint told prospective investors it believed its revenue would soar from about $135 million in 2020 to almost $1 billion by 2024, and to more than $2 billion in 2026. Yesterday's financial update included a boost to this year's revenue guidance, giving investors hope the company remains on track to accomplish its lofty growth estimates. 

Someone plugging a charger into an electric car in the garage.

Image source: ChargePoint Holdings.

Now what

ChargePoint said its quarterly revenue grew 61% year over year, and raised its full-year revenue guidance by 15% at the midpoint of the range to $230 million. Company President and CEO Pasquale Romano said in a statement that ChargePoint "significantly grew our commercial, fleet, and residential businesses." 

Accomplishments in the period included launching a charging agreement with Mercedes-Benz USA, acquiring an electric bus and commercial vehicle management provider, and an agreement to acquire another e-mobility technology provider. 

ChargePoint still trades at lofty levels. The company still hasn't produced profits, and even with the boosted guidance, it trades at a price-to-sales ratio of 32 based on the new 2021 sales projection. Investors should know this is a long-term, speculative holding. But raising guidance this early in its life cycle is a promising sign, helping to give shares a boost today.

Howard Smith owns shares of Chargepoint Holdings Inc. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Stocks Mentioned

ChargePoint Holdings Inc. Stock Quote
ChargePoint Holdings Inc.
$11.53 (0.79%) $0.09

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