ChargePoint's Earnings Fell Short. The Stock Is Rising Anyway.
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ChargePoint has grown sales faster than it expected.
Bing Guan/Bloomberg
The EV-charging company C
hargePoint
delivered second-quarter earnings that were a little worse than expected but the stock rose because sales and management’s forecasts mattered more.
For its fiscal second quarter, ChargePoint (ticker: CHPT) reported a loss of 28 cents a share from sales of $108 million, while Wall Street was looking for a per-share loss of about 25 cents from $103 million in sales. ChargePoint is still a young company, so investors are likely to focus on the strength of sales.
Looking ahead, ChargePoint maintained its forecast that full-year sales will range from $450 million to $500 million. The company expects to generate sales of about $130 million in the third quarter—the same amount analysts are projecting.
Overall, it seems like a fine earnings report. Investors appear to be pleased. The stock is up about 1% in after-hours trading.
“ChargePoint delivered another strong quarter, with continued growth across all verticals and geographies,” said CEO Pasquale Romano in the company’s news release. Sales to residential customers, commercial customer and electric fleet operators all jumped year over year.
“We continue to execute on our strategy, as demand continues to grow for our portfolio of industry-leading charging solutions for every vertical and in both North America and Europe,” added the CEO.
A lot has been going right for the company lately, especially in North America. Coming into Tuesday earnings, ChargePoint stock was up about 15% in the month since Senate Majority Leader Chuck Schumer and West Virginia Sen. Joe Manchin, both Democrats, announced a surprise deal—the Inflation Reduction Act—that advanced part of President Joe Biden’s climate change agenda, including tax credits to buy EVs. In those four weeks, the
S&P 500
is up about 2%.
California’s decision to essentially ban the sale of new gasoline-powered cars by 2035 also benefits the company. California’s EV penetration goals are more aggressive than goals set by the federal government and auto makers. Both want about half the cars sold to be all-electric by 2030. California’s 2030 goal amounts to about 68%.
The positive policy backdrop and accelerating EV sales have impacted ChargePoint’s top line revenue figures. For starters, the company has managed to beat sales each quarter since it went public in 2021 through a merger with a special purpose acquisition company, or SPAC.
What’s more, ChargePoint has grown sales faster than it expected to when it company proposed its SPAC merger. In late 2020, when ChargePoint announced its deal with a SPAC, the company expected to generate about $350 million in sales in calendar year 2022. The company expects to generate calendar year 2022 revenue closer to $475 million.
Higher sales revenue, though, hasn’t helped the stock. Shares are still down about 30% over the past year, while the S&P 500 and
Nasdaq Composite
are down about 12% and 22%, respectively.
Rising interest rates have sapped some investor enthusiasm for high-growth companies that don’t generate profits yet.
Options markets imply that ChargePoint stock will move about 7%, up or down, after earnings—a little higher than volatility seen after the past two quarterly reports.
Write to Al Root at allen.root@dowjones.com
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