When it comes to EV charging and sustainable energy sources, there is quite a bit of competition. Even though it is a nascent market, it has a multitude of fragmented and evolving players. Nonetheless, one stands dominant in the U.S., with its scale as its strongest asset. ChargePoint Holdings Inc. (CHPT) has significant market and customer breadth, and is well-poised to capture profits with the eventual widespread EV transition and adoption. (See ChargePoint stock charts on TipRanks)
In his coverage, David Kelley of Jefferies Group wrote optimistically of the stock, stating that ChargePoint is expected to leverage its scale, hardware, and software to turn operating profits by 2024. He believes that high margins will be also be produced from subscription fees for its cloud services.
Kelley initiated a Buy rating on the stock, and declared a price target of $40. This suggests a potential 12-month upside of 26.30%.
The four-star analyst explained that all purchases of its hardware include a cloud subscription, which over time will provide recurring service fees. Furthermore, he argues that “customers increasingly value software + services solutions at scale,” and that, coupled with the growing interest in sustainability, will provide for a strong outlook for the company.
As for Europe, ChargePoint remains somewhat of an outlier, but is making headway in order to penetrate the fragmented market. Kelley mentioned that “overall EV adoption in Europe dwarfs North America,” and “currently outpaces all other regions.” To capture this, CHPT has doubled its local workforce, is investing in R&D, and is actively negotiating with dozens of energy players in Europe.
On TipRanks, CHPT has an analyst rating consensus of Strong Buy, based on 5 Buy ratings. The average analyst ChargePoint Holdings price target is $37.20, representing a possible 12-month upside of 17.46%. On Friday, ChargePoint closed at a share price of $31.67.
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.