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ChargePoint (NYSE: CHPT), a leading builder of electric vehicle (EV) charging stations, went public by merging with a special purpose acquisition company (SPAC) in March 2021. It opened at $32.30 per share on its first day, but it now trades at about $1.
ChargePoint's stock plummeted as macroeconomic and competitive headwinds curbed its growth. Rising interest rates also highlighted its ugly losses and crushed its valuations. So should investors buy, sell, or hold this out-of-favor EV infrastructure stock today?
Understanding ChargePoint's business
ChargePoint builds EV charging stations for residential and commercial customers. At the end of its latest quarter, it directly managed 329,000 charging ports in North America and Europe, and it now serves around 80% of the Fortune 500 companies.
ChargePoint established an early mover's advantage in the EV charging market when it was founded 18 years ago, but it now faces intense competition from Tesla's (NASDAQ: TSLA) Superchargers, which are now compatible with more third-party vehicles; and smaller challengers like EVgo (NASDAQ: EVGO).
ChargePoint grew rapidly in fiscal 2022 and fiscal 2023 (which ended in January 2023) as the EV market began recovering from the pandemic, but its growth slowed to a crawl over the past two years as rising interest rates chilled the market. It also remained unprofitable on a generally accepted accounting principles (GAAP) basis as its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) stayed negative.
| Metric | FY 2022 | FY 2023 | FY 2024 | 9M FY 2025 |
|---|---|---|---|---|
| Revenue | $242 million | $468 million | $507 million | $315 million |
| Growth (YOY) | 65% | 93% | 8% | (19%) |
| Operating margin | (110%) | (73%) | (89%) | (63%) |
| Net income (loss) | ($299 million) | ($345 million) | ($458 million) | ($218 million) |
| Adjusted EBITDA | N/A | ($217 million) | ($273 million) | ($99 million) |
Data source: ChargePoint. YOY = Year-over-year.
For fiscal 2025, ChargePoint expects its revenue to decline 17% to 19%. Analysts expect its revenue to dip 18% to $416 million, but they also expect the company to narrow its GAAP net loss to $270 million as its adjusted EBITDA improves to negative $127 million.
The reasons to sell or avoid ChargePoint's stock
ChargePoint is the largest EV charging station company in North America and Europe, but most of its network still runs on older Level 2 AC chargers, which can take four to five hours to fully charge a vehicle. By comparison, the newer Level 3 DC chargers can charge a vehicle up to 80% in about 20 to 40 minutes. Tesla's Superchargers and most of EVgo's charging stalls use Level 3 DC chargers. Level 2 chargers are cheaper to use and better suited for homes and offices, but they're not practical for longer trips. So to keep pace with the competition, ChargePoint is deploying fewer higher-margin AC chargers and more lower-margin DC chargers -- and it expects that product mix shift to compress its near-term gross margin.