ChargePoint (CHPT 1.69%) shares have been pummeled over the last year. The stock price of this electric vehicle (EV) charging network and equipment company plunged more than 80% in the last 12 months.
However, one analyst thinks the stock is now set up to be a big winner for investors. Benchmark analyst Michael Legg just initiated coverage on ChargePoint with a buy rating and share price target of $4.25. That would represent a more than 100% gain in the stock from Tuesday's closing price of $2.06 per share.
The EV demand question
ChargePoint is one of many stocks in the EV sector that has been punished in recent months. But it is also one that could help to turn around the lagging demand many EV makers are experiencing. That's because charging logistics remains one of the biggest concerns for consumers who are considering converting to a fully electric car.
Benchmark's analyst focused on ChargePoint's position in the sale of charging stations and the subscription revenue that comes from its large network. As the network grows, and if reliability concerns are put to rest, ChargePoint could benefit from a resurgence in demand for EVs. Benchmark believes the company is in a leading position to expand and capitalize as demand for EVs and needed charging infrastructure grows.
NYSE: CHPT
Key Data Points
Is ChargePoint a good stock to own?
Even if this analyst is right, a $4.25 share price still only gets ChargePoint stock back to where it was last fall. That still wouldn't make longer-term shareholders very happy. But looking ahead, ChargePoint could still be a good stock to own.
Risks include the competition from Tesla's dominant Supercharger network and a reputation for equipment issues to be overcome. The bottom line is whether one believes in a long-term transition to EVs at a meaningful level for the U.S. and Europe, where ChargePoint operates. Investors can hear more from the company itself when it provides its fourth-quarter 2023 update scheduled for March 5.
