ChargePoint (NYSE:CHPT) may have suffered a nearly crippling 78% loss in the past year, but it remains poised for a potential redemption. Specializing in EV charging infrastructure, the company finds itself in an industry with immense relevance. With the gradual proliferation of EVs in the personal mobility space, the demand for public charging is expected to skyrocket. While its recent trajectory has been bleak, the potential alignment of monetary policy tailwinds points to a promising, albeit speculative, opportunity for CHPT stock.
Assessing the Real Picture of CHPT Stock
Within a span of just one year, CHPT stock plummeted by almost 80%, effectively wiping out a significant portion of its market value. Trading at a mere two dollars, ChargePoint shares are now a far cry from their original offering price of $10 when the company went public via a reverse merger with a special-purpose acquisition company (SPAC).
At its peak, CHPT stock was hurtling towards the $50 level, a stark contrast to its current devalued state. However, the downturn was not solely due to technical irrationality. ChargePoint’s use of a plug format that was different from the Tesla (NASDAQ:TSLA) charging standard or the North American Charging Standard (NACS) put it at a disadvantage as automakers transitioned to NACS, exacerbating the company’s woes.
Despite pivoting towards NACS, ChargePoint’s financial performance target misses resulted in Wall Street losing confidence in CHPT stock. However, with the broader adoption of EVs, the necessity of public charging infrastructure becomes ever more apparent, presenting a potential growth opportunity.
Furthermore, physical constraints of home charging, where not everyone has access to a garage, coupled with potential safety hazards, reinforce the importance of public charging infrastructure.
The Federal Reserve’s Role
The Federal Reserve is expected to play a pivotal role in CHPT stock’s potential resurgence. The central bank’s recent hints at interest rate cuts this year could lead to a return to a gradual inflation paradigm, incentivizing consumer spending, and ultimately benefiting the retail business, including the EV sector. Should more EVs hit the road as a result, it would serve as a tailwind for CHPT stock, positioning it favorably for a potential rebound.
Focusing on the Narrative, Not Just Valuation
Assessing ChargePoint purely on financial metrics is challenging, given its unique industry dynamics. While its trailing-year revenue multiple stands at 1.46x, lower than some of its peers, such as EVgo (NASDAQ:EVGO), trading at a revenue multiple of 1.84x, the real worth of CHPT stock lies in its narrative. Anticipated broader EV adoption and the necessity of public charging infrastructure, combined with potential monetary policy shifts, make ChargePoint a name worth monitoring.
Analysts’ Insights on CHPT Stock
According to Wall Street, CHPT stock holds a Moderate Buy consensus rating, with analysts advocating six Buys, 12 Holds, and zero Sell ratings. The average CHPT stock price target stands at $3.28, implying a 49.3% upside potential.
The Takeaway: A Second Look at CHPT Stock
Despite its struggles in the past year, ChargePoint’s core business remains relevant. The potential shift in the Federal Reserve’s monetary policy adds a layer of optimism, signifying a potential turnaround for CHPT stock. This certainly makes ChargePoint worth a second look.