Needham analyst Chris Pierce reiterated ChargePoint Holdings, Inc (NYSE:CHPT) with a Buy rating and a $3 price target.
Pierce said ChargePoint delivered fiscal first-quarter 2025 revenue above the midpoint of guidance, finding its footing vs. internal expectations for the first time in multiple quarters, a positive turnaround.
He expects the consensus second-quarter estimate to come down based on company guidance.
Also Read: What's Going On With ChargePoint Stock After Collaborating With Airbnb?
Still, the likelihood of a negative surprise is materially lower, given first-quarter execution, despite commentary of deal slippage, which aligns with ChargePoint's forecasts.
Given past results, the analyst noted a stabilization in the business vs expectations and the lower likelihood of a negative top-line surprise as a net positive.
ChargePoint cited revenue and adjusted EBITDA coming in ahead of internal plans in the quarter, increasing Pierce's confidence in the company achieving what the consensus estimate implies is a stretch goal.
Despite a lower revenue assumption, the analyst still modeled a fourth-quarter adjusted EBITDA loss, but it was narrower than his prior forecast.
While ChargePoint cited confidence in its longer-term pipeline, pointing to above-normal seasonality driving higher fiscal second-half 2025 revenue,
Pierce noted this as a show-me story.
He saw a higher bar here post-second-quarter guidance. The gross margin and operating expenditure controls are currently doing the heavy lifting in the model.
Still, the consensus second-half revenue estimate needs to be higher, given minimal concrete proof points to date.
Pierce said a surge in working capital was the driver, given an inventory build in the quarter. His second-half revenue estimate is ~30% above his first-half estimate, setting a high bar.
ChargePoint is converting $30 million in restricted cash to unrestricted cash and has yet to tap its $150 million line of credit. Still, if revenue growth is pushed out further, he expects liquidity concerns to grow unless ChargePoint can reverse its working capital growth.
Pierce projected second-quarter revenue and EPS of $112 million (prior $120 million) and $(0.17).
Oppenheimer analyst Colin Rusch had a Perform rating on ChargePoint.
As ChargePoint beat street expectations across metrics but guided slightly below the street, the analyst noted a solid foundation building for the company as it returns to growth.
First, vehicles per public charging port have reached 20 in the US versus multiple studies suggesting a healthy level of charging infrastructure at 8-12 vehicles/port.
Rusch acknowledged lag partly due to NEVI support working through the allocation system and tighter budget management for charging hosts.
The analyst expects both to become material growth drivers as the year progresses.
On the operational side, he noted the company is executing well in its cost-out efforts, product/software enhancements, and cash management.
Rusch remained on the sidelines, looking for further evidence of revenue inflection higher.
Rusch projected second-quarter revenue and EPS of $114.1 million (prior $120.0 million) and $(0.07).
Price Action: CHPT shares traded higher by 4.05% to $1.80 at the last check on Thursday.
Photo via Wikimedia Commons