On Thursday, Roth/MKM has adjusted its stance on ChargePoint (NYSE:CHPT) Holdings Inc. (NYSE:CHPT) shares, reducing the price target to $1.75 from the previous $2.00, while maintaining a Neutral rating on the stock.
The firm based its decision on ChargePoint's first-quarter fiscal year 2025 revenue performance, which saw an 18% year-over-year decline. Additionally, the company has forecasted a further mid-point revenue decrease of 25% for the July quarter.
ChargePoint, a provider of electric vehicle charging stations, has experienced a delay that resulted in $10 million in revenue being deferred.
The company's management remains optimistic about a significant revenue recovery by the end of the fiscal year, yet they have not provided backlog metrics or additional details to bolster investor confidence.
The firm's outlook on ChargePoint is cautious, reflecting a wait-and-see approach. They indicate a need for evidence of revenue growth and clearer profit visibility before considering a more positive perspective on the company's shares. This position comes in light of the recent financial results and future expectations set by ChargePoint's management.
The lowered price target and maintained rating come at a time when ChargePoint is navigating through operational challenges that impact its financial performance.
The company's ability to meet its own revenue rebound expectations towards the end of the fiscal year remains a focal point for investors and market analysts alike.
In other recent news, ChargePoint Holdings reported first-quarter earnings that slightly exceeded analyst expectations. The company announced a loss per share of -$0.17, which was better than the anticipated -$0.19 per share.
Revenue for the quarter was $107.04 million, edging above the consensus estimate of $105.84 million, yet marking an 18% decrease from the same quarter of the previous year.
RBC Capital maintained its Sector Perform rating on ChargePoint, highlighting that the company's adjusted EBITDA surpassed expectations due to lower operational expenditure.
Similarly, Evercore ISI reiterated an Outperform rating, praising ChargePoint's strategic progress and its focus on achieving positive adjusted EBITDA by the end of 2024.
However, ChargePoint's second-quarter revenue guidance, ranging from $108 million to $118 million, fell short of the analyst consensus of $121.4 million.
This recent development is influencing the company's stock, but ChargePoint remains committed to reaching EBITDA breakeven in the fourth quarter of 2025.
InvestingPro Insights
As ChargePoint Holdings Inc. (NYSE:CHPT) grapples with operational challenges and a revised outlook from Roth/MKM, real-time data from InvestingPro provides additional context for investors. ChargePoint's market capitalization stands at $735.75 million, reflecting the market's current valuation of the company. Despite a challenging fiscal quarter, the company holds more cash than debt, which is a positive sign of liquidity. Moreover, ChargePoint's liquid assets surpass short-term obligations, indicating near-term financial stability.
However, there are areas of concern. ChargePoint is not only experiencing a rapid cash burn but also suffers from weak gross profit margins of 5.94%, as reported over the last twelve months as of Q4 2024. This is further compounded by a significant operating income margin decline to -88.81% in the same period. The company's stock price has also been quite volatile, with a 1-year price total return plummeting by -81.73%, reflecting investor sentiment and market conditions.
Investors looking for a deeper dive into ChargePoint's financial health and future prospects can find additional InvestingPro Tips on the company's profile. The platform offers more than 10 additional tips, including insights on earnings revisions, profitability expectations, and stock price movements. For those considering an InvestingPro subscription, use the coupon code PRONEWS24 to receive an additional 10% off a yearly or biyearly Pro and Pro+ subscription, providing a more comprehensive investment analysis toolkit.
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