JP.Morgan reiterated an Overweight rating on ChargePoint Holdings Inc (NYSE:CHPT) and cut their 12-month price target on the stock to $13.00 (from $15.00) ahead of the EV charging company’s 2Q earnings report.
ChargePoint guided its F2Q revenue to a range of $148 million to $158M. This marks a seasonal increase compared to F1Q revenue of $130M. However, JPMorgan analysts believe that the growth is slightly restrained due to uncertain commercial demand. Their projections align with the lower end of ChargePoint's guidance for F2Q24 revenue, which stands at $148M, falling below the general consensus estimates of $153M.
“We think that similar to last quarter, the commercial and workplace segments could come in weaker relative to fleet and residential since some customers continued to be disciplined on discretionary spending and return to office policies appear to be unchanged over the past few months,” writes JPMorgan in a note.
As for adjusted EBITDA, JPMorgan is in line with the consensus median of a $40M loss, though they would like to note that improvement could be more 2H weighted than currently anticipated.
Moreover, JPMorgan economists have revised their expectations and are now expecting a recession to be postponed to 2024. They believe that services are “next in line” to experience a decline in the near future.
Nevertheless, JPMorgan recognizes the potential for a positive surprise in their projected full-year revenue figures. This could materialize as ChargePoint gains clearer visibility into its pipeline for the rest of the year, a factor that will become apparent in its upcoming F3Q guidance.
Shares of CHPT are up 1.31% near end-of-day trading Wednesday.