Smart Finance App learned that ChargePoint Holdings (CHPT.US), one of the largest electric vehicle charging network operators in North America, saw its stock price plunge over 17% on the first trading day after announcing its financial report, eventually closing near a historic low of $1.39, mainly due to revenue warnings and proposed layoff plans that led to a substantial decline in the company's market cap and stock price. Since the beginning of this year, under the pressure of the Fed's high interest rates, the demand for electric vehicles in the United States has continued to decline, resulting in ChargePoint's once heavily invested in charging station network continuing to struggle in operation, with the company's stock price dropping as much as 40% this year.

Despite ChargePoint significantly cutting its revenue guidance range and accelerating deterioration of its balance sheet, some Wall Street analysts do not believe the company's future will be as bleak as its stock performance suggests, because cost reduction measures and operational efficiency of the electric vehicle charging station network will support profit margins, implying that ChargePoint's fundamentals are expected to see a substantial turnaround soon.

"We believe the company's financial performance fundamentals are very close to the bottom," said the Oppenheimer analyst team led by Colin Rusch in a research report, but added in the report that the specific trajectory of the recovery is still unclear.

"Through expenditure adjustments and existing resources, we believe the company has enough liquidity to achieve breakeven, even if its timetable is extended to the 2027 fiscal year," said analysts from Oppenheimer in the report.

The well-known Wall Street investment institution Oppenheimer continues to maintain a "hold" rating for ChargePoint, and has not yet given a specific target price. In a recent report, another investment institution RBC Capital also maintains a "hold" rating for the stock, but has lowered the stock's target price within 12 months from $3 to $2.50. Based on the 12-month target prices provided by 13 Wall Street analysts for ChargePoint Holdings in the past 3 months, the average target price is approximately $2.40.

Richard K. Wilmot, CEO of ChargePoint, said during the earnings conference call that the company plans to shift its focus to a "positive growth strategy" by 2026, benefiting from the launch of next-generation software and hardware.

In order to achieve EBITDA breakeven, ChargePoint needs to continuously increase its revenue scale, plan to achieve this by delaying some new trades until 2025, and capitalize on opportunities to increase fleet charging station coverage, some of which are "quite significant" growth opportunities, interim CFO Mansi Khetani said during the earnings conference, clarifying that the timing of these trades was one of the main reasons for the disappointing sales in the second quarter.

"Due to our larger installation base, the revenue from subscriptions will continue to grow," Khetani said. "The growth of [fleet coverage] will account for a significant proportion of our total revenue." "Considering the increasing growth opportunities the company is currently seeing, it is expected that subscription growth will contribute to about one-third of the revenue scale over time."

After market close on September 4th, ChargePoint announced weak second-quarter performance and disappointing third-quarter guidance, and stated plans to cut 15% of its workforce as part of restructuring. The data shows that in the second fiscal quarter ended July 31, ChargePoint's revenue dropped by 27.6% to $0.109 billion, nearly $5 million less than expected. The company's second-quarter loss per share was $0.16, compared to a loss per share of $0.35 in the same period last year, narrowing as expected.

For the third-quarter performance expectations, ChargePoint expects a sales range of $85 million to $95 million, a decrease compared to the Q2 sales figures announced this time, and well below the market consensus of $0.1359 billion.

It is worth mentioning that the company plans to restructure its business and reduce its global workforce by 15%, a move that is expected to cost $10 million in severance and related expenses. ChargePoint expects this layoff to save approximately $41 million in operating expenses by improving operational efficiency.