ChargePoint Holdings (NYSE:CHPT)
As of 1 p.m., E.T. on Friday, shares of ChargePoint Holdings (NYSE:CHPT) had risen by 21.6% this week. E.T. on Friday, as reported by S&P Global Market Intelligence. An analyst has identified ChargePoint as a significant potential winner from the Inflation Reduction Act, following the company’s impressive quarterly results and outlook last week (IRA).
What’s the Reason
Credit Suisse analyst Maheep Mandloi began covering ChargePoint Holdings (NYSE:CHPT) shares around midweek, assigning the company an outperform rating and setting a $22 per share price target. To put things in perspective, even after this week’s incredible surge, ChargePoint stock is trading at roughly $17.55 per share at the time of writing.
After the IRA was passed and signed into law a few weeks ago, Mandloi is feeling confident about ChargePoint. The IRA plans to invest heavily in renewable energy infrastructure, including electric vehicles and has reinstated tax rebates for E.V. charging stations.
Based on ChargePoint Holdings (NYSE:CHPT) first-mover advantage in the industry and “capital-light growth plan,” as well as the stock’s excellent valuation at the time of his rating, Mandloi believes the company will profit from the IRA. Regarding commercial level-2 chargers in North America, ChargePoint has no competition. The company sells charging hardware, software, and service subscriptions. North America and Europe were home to over 200,000 operational charging stations as of August 31.
After implementing the IRA and releasing solid financial results for the company’s second quarter, some analysts, including Mandloi, have been bullish on ChargePoint’s future prospects. For the first time, ChargePoint’s quarterly revenue was over $100 million in Q2, up 93% year over year.
Quarterly losses for ChargePoint Holdings (NYSE:CHPT) grew, but the company’s gross margin improved from the previous quarter, and its installed E.V. charging points increased by 70% from the previous year.
In particular, ChargePoint Holdings (NYSE:CHPT) anticipates a 100% year-over-year increase in third-quarter sales and a solid second half of the year that will help it earn $450 million to $500 million in revenue for the year.
Investors bought up on E.V. shares this week because they believe ChargePoint Holdings (NYSE:CHPT) is well positioned to grab chances as E.V. sales grow and spending under the IRA goes into gear.
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