If you’re a believer in the growth of electric vehicles (EVs), Chargepoint (NYSE:CHPT) remains an attractive opportunity. And even though CHPT stock is slowly beginning to bounce off its springtime lows, there is plenty of upside remaining.
As you may recall, Chargepoint is a special purpose acquisition company (SPAC) stock that began trading on the New York Stock Exchange in March after its successful merger with Switchback Energy Acquisition.
Rather than building vehicles, this EV stock touts itself as the “first publicly traded electric vehicle charging company operating across continents.” The company has more than 125,000 public charging stations in the United States, Europe and elsewhere. Chargepoint designs, builds and supports the charging station hardware, energy management software and even maintains a mobile app for its customers.
Bloomberg believes that EV sales will increase from 1.7 million units in 2020 to as many as 26 million units in 2030. So, investing in electric vehicle infrastructure is a great way to play the growing EV market without having to guess which automotive company will beat out the competition. The company believes that the total investment in EV charging infrastructure in the U.S. and Europe will reach $60 billion by 2030 and climb to $192 billion by 2040.
Obviously, there’s lots of money to be made in this budding space.
CHPT Stock: Early Setbacks But Future Success
Eager investors jumped into this name even before the merger went through, running Switchback up to nearly $50 in December. However, by the time CHPT stock made its debut on Mar. 1, shares gave up about 40% of those gains and were trading closer to $30. Since then, the stock has fallen as low as $19, but it appears to finally be rebuilding some momentum. Today, it changes hands for around $25.
What happened? Clearly, investor enthusiasm got ahead of itself.
For instance, investors were disappointed in March when Chargepoint guided for 2021 revenue of $195 million to $205 million. The midpoint of that guidance, $200 million, is slightly “higher than the $198 million that ChargePoint previously forecast.” However, that was no longer good enough for investors.
Another problem has been the recent semiconductor chip shortage that is taking an oversized bite out of EV production. As reported by City A.M., a typical automobile needs roughly 1,300 semiconductor chips. Conversely, EVs can require as many as 3,500 chips to operate all the bells and whistles.
Plus, even though President Joe Biden is proposing a $3 trillion economic spending package that includes money for clean transportation and EV stations, CHPT stock remains depressed.
But the losses of the last four months means that there’s an opportunity to buy Chargepoint at a discounted price. And those prices won’t be depressed for long.
For example, the company recently made a deal with a legacy automaker to increase charging network access to its drivers. That news alone sent CHPT stock up by 5%. And, according to analysts, this is only the beginning of an expected surge.
Barron’s reports that the stock is trading at “fire-sale price.” Additionally, R.F. Lafferty analyst Jamie Perez recently initiated coverage of Chargepoint with a “buy” rating as well as a $29 price target.
The Bottom Line on CHPT Stock
Chargepoint is a growing company that has the advantage of being an early innovator in the EV space. Providing and maintaining infrastructure that will power EVs for decades, its stations could become as ubiquitous as today’s gas stations.
CHPT stock is a great value right now. This name continues to have a “B” grade in my Portfolio Grader, where it carries a buy recommendation.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
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