By Michael Elkins
EV charging solutions company, ChargePoint Holdings Inc (NYSE:CHPT) was up 1.42% in pre-market trading Tuesday after a J.P. Morgan analyst released a note reiterating an Overweight rating on the stock and raising the 12-month price target to $20.00 from $18.00.
The change comes ahead of the company’s second quarterly earnings report, which is scheduled to be released next week.
J.P. Morgan expects ChargePoint to report 2Q revenue slightly below consensus. Their current estimates for F2Q23 revenues are $102M, up from our prior estimates of $101M vs. consensus estimates of $104M. For the full year, J.P. Morgan estimates revenues of $463M, up from prior estimates of $459M vs. consensus estimates of $476M and guidance of $475M at the midpoint.
Estimates for F2Q23 non-GAAP gross margins are 17%, down from prior estimates of 18% and consensus estimates of 18%.
The analyst wrote in his note, “There are several incentives for EV charging providers on both the supply and demand sides, which complement the existing NEVI funding expected to flow through to companies at the end of this year and into the early part of 2023. Specifically, the recent Inflation Reduction Act (IRA) could offer attractive benefits to charging providers (directly and indirectly), including tax credits for passenger and commercial EVs, as well as commercial and residential charging installations.”
The analyst believes that the tax credits should boost EV penetration, which is likely to result in strong and growing demand for ChargePoint’s products across retail and fleet.
ChargePoint will hold its F2Q earnings call on Tuesday, August 30 at 4:30 pm ET.