Goldman Sachs (NYSE:GS) has reiterated a Sell rating on shares of ChargePoint (NYSE:CHPT) Holdings Inc. (NYSE: CHPT), with a price target of $1.25.
The firm's analysis followed ChargePoint's second-quarter fiscal year 2025 revenue report, which fell short of expectations. The company's revenue for the quarter ending in July was $109 million, missing the consensus estimate of $114 million set by FactSet.
ChargePoint's non-GAAP EBITDA loss was also slightly greater than anticipated, coming in at -$34.1 million compared to the Street's forecast of -$33.7 million.
ChargePoint provided guidance for its third-quarter fiscal year 2025 revenue, projecting it to be between $85 million and $95 million. The forecast is significantly lower than the $136 million analysts had been expecting.
Additionally, the company has adjusted its timeline for achieving positive non-GAAP EBITDA, now setting its sights on fiscal year 2026, a delay from the previous goal of the fourth quarter of fiscal year 2025.
The firm highlighted several challenges facing ChargePoint, including slower electric vehicle (EV) volume growth and intense competition within the charging industry. These factors are expected to continue impacting the company's fundamentals, potentially keeping the stock under pressure until there is clearer visibility on the timing and extent of a market recovery.
Despite these challenges, ChargePoint's management cited higher utilization rates on its charging network and growing customer interest in projects as positive signs that could bolster revenue in fiscal years 2026 and 2027. However, the firm noted that the timing and pace of this recovery are difficult to predict.
ChargePoint reported its Q2 fiscal 2025 earnings, where the company's revenue reached $109 million, aligning with its projected guidance. This was accompanied by a significant reduction in non-GAAP operating expenses and a strategic focus on improving hardware margins and subscription services.
However, RBC Capital has revised its revenue and adjusted EBITDA estimates for fiscal years 2025 and 2026, leading to a reduction in the price target on the stock to $2.50, down from the previous $3.00. This adjustment is attributed to ongoing demand weakness and recent changes in internal personnel.
InvestingPro Insights
Following the recent financial updates from ChargePoint Holdings Inc. (NYSE:CHPT), insights from InvestingPro shed light on the company's market position and future outlook. With a market capitalization of $718.76 million, ChargePoint's financial health and stock performance are key areas of interest for investors. Notably, the company's stock has experienced significant volatility, reflecting a price drop of over 76% in the past year, which aligns with Goldman Sachs' concerns about the company's challenges and competitive pressures.
InvestingPro Tips highlight that ChargePoint is quickly burning through cash and analysts do not expect the company to be profitable within the current year. The company's weak gross profit margin of 5.13% further underscores the financial difficulties it faces. Despite these challenges, ChargePoint's liquid assets do exceed its short-term obligations, suggesting some degree of financial stability in the near term.
Investors seeking a deeper dive into ChargePoint's financial metrics and additional InvestingPro Tips can explore the analysis available on InvestingPro. Currently, there are 11 more tips listed on the platform that could provide valuable insights for those considering an investment in ChargePoint.
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