ChargePoint's Shifting Fortunes: Analyst Lowers Forecast Citing Slow EV Market And Emerging Cost Reduction Strategies

RBC Capital Markets analyst Christopher Dendrinos downgraded ChargePoint Holdings, Inc. CHPT to Sector Perform from Outperform, lowering the forecast to $3 from $3.50.

Yesterday, the company reported fourth-quarter sales of $115.833 million, which missed the analyst consensus estimate of $118.777 million.

The analyst downgraded the stock, citing a challenging macro backdrop impacting financial performance.

Per Dendrinos, continued revenue pressure as a result of sluggish macro demand is a concern over the company’s first quarter of 2025 guidance.

Of the major issues, the pace of BEV adoption in the U.S. has stagnated, holding at ~8% for the past nine months and weighing on consumer sentiment and demand for charging infrastructure, the analyst notes.

According to Dendrinos, moving to the sidelines is prudent until there are “greater signs” of sustainable EV charger demand. 

ChargePoint continues to bear the brunt of sluggish EV sales growth and poor customer sentiment, causing buyers to delay purchases despite network utilization data demonstrating strong and increasing underlying demand.

However, the company is no longer calling for “modest revenue growth this year,” and in the near term, the soft demand environment continues to weigh, Dendrinos flagged.

However, the company’s design partnership with AcBel helps support cost reduction efforts, the analyst writes. 

Announced last month, the opportunity for ChargePoint is to reduce its in-house R&D spending while leveraging the experience of AcBel. 

According to the analyst, gross margin improvement should become more visible into the fourth quarter of FY25 as the company continues to work through its higher-cost inventory and benefits from the shift to lower-cost Asian manufacturing. 

The analyst lowered FY25 revenue estimate to $519.6 million from the prior forecast of $553.3 million.

Dendrinos expects an FY25 adjusted EPS loss of $(0.41), wider than the prior view of a $(0.39) loss.

Price Action: CHPT shares are trading lower by 2.75% to $1.9450 on the last check Wednesday. 

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