Despite OEM-Tesla Agreements, Analyst Sees CHPT Gaining In North American Public Charging Market

Oppenheimer analyst Colin Rusch reiterated an Outperform rating on the shares of ChargePoint Holdings Inc CHPT and lowered the price target from $14 to $13.

Last week, CHPT announced a commitment by investors to purchase $175 million of common stock and raised net proceeds of $57 million under the at-the-market (ATM) facility during Q3 FY24.

CHPT also extended the due date of its convertible debt to 2028 (from 2027) and adjusted the convertible price from $24.03/share to $12/ share. 

Thus, the analyst has changed the estimates to account for additional interest expense on its convert and dilution from equity sold through its ATM, but has not changed revenue or operating expense estimates. 

The analyst's FY24 adj. EPS estimate goes to $(0.58) from $(0.60), while the FY25 adj. EPS estimate remains $(0.18). FY26 adj. EPS estimate

goes to $0.18 from $0.21.

The analyst continues to see CHPT gaining incremental share in North American public charging points even after numerous vehicle OEMs announced agreements on network access and plug standardization with Tesla Inc TSLA.

Also Read: Hyundai Joins The Club - The Latest Company To Gain Access Tesla Superchargers In North America

The analyst believes management is committed to flat-lining operating expenditure until reaching EBITDA+ targets and that the company has more than enough capacity on its balance sheet to reach EBITDA+.

The analyst remains constructive on shares, especially given the de risked balance sheet. The price target is based on 5.0x the analyst's FY26 revenue estimate of $1.09 billion (unchanged), driven by incremental dilution from additional shares issued.

Price Action: CHPT shares are trading higher by 5.77% at $3.57 on the last check Tuesday.