Electric vehicle (EV) charging infrastructure provider ChargePoint Holdings (CHPT) recently went public through an SPAC deal. And while President Biden’s proposed EV charging network expansion plan is surely positive news for the industry, CHPT’s low profitability has caused concern among investors regarding the stock’s upside potential. So, we think CHPT could face downward pressure in the near term. Read more to find out.Electric vehicle (EV) charging solutions provider ChargePoint Holdings, Inc. (CHPT) offers a portfolio of hardware, software, and services for residential, commercial and fleet customers in the United States. After an SPAC merger, CHPT made its debut on the New York Stock Exchange on March 1, becoming the world’s first publicly traded global EV charging company.
But CHPT’s stock price has slumped 10.7% over the past months. The stock’s premium valuation despite the company’s unimpressive financials made investors skeptical about the stock’s upside potential in the near term.
Although the EV sector’s market potential is enormous, the risk of heated competition in the nascent sector is high. And with dominant players generating higher profit margins and revenues, it may be tough for CHPT to survive in the crowded EV space.