ChargePoint (CHPT 0.32%), a leading builder of electric vehicle charging stations in North America and Europe, has disappointed a lot of investors. It went public by merging with a special purpose acquisition company (SPAC) just over four years ago, and it opened at $32.30 per share on its first day. Today, it trades at less than $0.60.
It's easy to see why the bears mauled ChargePoint's stock. Its top-line growth decelerated, it racked up steep losses, and it faced more competition from Tesla's (TSLA +7.62%) Superchargers and smaller competitors like EVgo (EVGO +0.49%). It's also increased its outstanding shares by 65% since its public debut to cover its stock-based compensation and secondary offerings, and it's still burning lots of cash. Its stock could even be delisted if its price stays below the $1 threshold.
Image source: Getty Images.
But as Warren Buffett famously said, investors should be "greedy only when others are fearful" -- and there's plenty of fear baked into ChargePoint's stock price right now.
I'll take a look at the contrarian case for ChargePoint -- and why it might be worth buying before it posts its next earnings report in late May or early June.
Understanding ChargePoint's business model
ChargePoint builds EV charging stalls for residential and commercial customers. At the end of fiscal 2025 (which ended this January), it managed 342,000 charging ports. More than 33,000 of those ports were DC (Level 3) fast chargers, while the rest were slower Level 2 chargers. By comparison, Tesla operates more than 60,000 Level 3 Superchargers globally.
Tesla might seem like a major threat to ChargePoint, but the two companies have different business models. ChargePoint mainly sells connected charging stations to properties that want to host their own charging stations and set their own prices. It also provides those hosts with network access, billing, and customer support services. Tesla's Superchargers are stand-alone stalls that don't offer any of those connected services.
Therefore, ChargePoint's chargers and Tesla's Superchargers aren't really interchangeable. Instead, ChargePoint's main competitor is EVgo, which operates a similar business model across its smaller network of more than 4,000 chargers.
NYSE: CHPT
Key Data Points
What happened to ChargePoint over the past three years?
ChargePoint grew like a weed in fiscal 2022 and fiscal 2023 as the EV market heated up after the pandemic. But in fiscal 2024, high interest rates chilled the EV market and curbed the market's appetite for new charging stations. As a result, its adjusted gross margins plunged, its operating and net losses widened on a generally accepted accounting principles (GAAP) basis, and its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) sank deeper into negative territory.
|
Metric |
FY 2022 |
FY 2023 |
FY 2024 |
FY 2025 |
|---|---|---|---|---|
|
Revenue |
$242 million |
$468 million |
$507 million |
$417 million |
|
Growth (YOY) |
65% |
93% |
8% |
(18%) |
|
Adjusted gross margin |
24% |
20% |
8% |
26% |
|
Operating margin |
(110%) |
(73%) |
(89%) |
(61%) |
|
Net income (loss) |
($299 million) |
($345 million) |
($458 million) |
($283 million) |
|
Adjusted EBITDA |
N/A |
($217 million) |
($273 million) |
($117 million) |
Data source: ChargePoint. YOY = Year-over-year.
Why could ChargePoint's rebound over the next few years?
But in fiscal 2025, some green shoots appeared. Its full-year revenue still declined -- but its adjusted gross margins expanded, it significantly narrowed its operating and net losses, and its adjusted EBITDA improved. It rolled out a dynamic pricing model to strengthen its gross margins, and it executed two rounds of layoffs (12% of its workforce last January and another 15% of its workforce last September) to boost its operating margins.
For the first quarter of fiscal 2026, ChargePoint still expects its revenue to decline by a midpoint of 7% year over year. For the full year, analysts expect its revenue to rise 11% -- but that outlook might be affected by unpredictable tariffs, elevated interest rates, the intensifying trade war, and other headwinds for the EV market.
However, ChargePoint still expects to achieve "a quarter" of positive adjusted EBITDA in fiscal 2026. Analysts expect its adjusted EBITDA to turn positive in fiscal 2027. That stabilization could limit its downside potential and eventually drive its stock higher.
With an enterprise value of $434 million, ChargePoint trades at less than 1 times its estimated sales for fiscal 2026. Therefore, any positive news could drive its stock higher. Meanwhile, 24% of its outstanding shares were being shorted at the end of March, which makes it ripe for a short squeeze in this volatile market. That might be why its insiders bought 15 times as many shares as they sold over the past 12 months.
Why it could be the right time to buy ChargePoint's stock
ChargePoint is still a risky investment, but this unloved stock could surge higher if it posts better-than-expected results for the first quarter, reinforces its goal of achieving a positive quarterly adjusted EBITDA this year, and provides a clearer near-term outlook to cut through this messy macro environment. Those positive developments could send the shorts scrambling, spark insider buying, and make ChargePoint a more appealing stock for deep-value investors.
