Please ensure Javascript is enabled for purposes of website accessibility

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.

Motley Fool Issues Rare “All In” Buy Alert

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

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

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
351%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/30/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.