UBS initiated coverage on ChargePoint Holdings (NYSE:CHPT) with a Buy rating and set a 12-month price target of $9.00 on the EV charging stock.
ChargePoint proudly boasts the second-largest network of Level 2 chargers in North America, holding a commanding 50% market share. Multiple consultant studies predict that approximately 90% of future charging stations in the U.S. will feature Level 2 chargers. This positions ChargePoint with a significant advantage in the evolving market landscape.
Moreover, ChargePoint benefits from a substantial customer base, consisting of large corporations. This robust foundation supports the company's "land and expand" growth strategy as they work toward achieving break-even EBITDA by the fourth fiscal quarter of 2025. Their efforts to expand gross margins and mitigate operational challenges will further aid in their progress.
Analysts wrote in a note, “We believe CHPT's market leading position, coupled with its land-and-expand strategy will help the company to grow at least in line with the total market as new customer relationships are established and existing relationships deepened.”
UBS models fiscal 2026 Revenue and EBITDA of $1.33 billion and $94millino, ahead of the consensus estimates of $1.18B & $60M, respectively.
Recent announcements surrounding the adoption of Tesla’s NACS charging connector have raised concerns from investors. However, NACS is a simple hardware difference that can be solved by the use of an adaptor, or a simple swapping of existing charging chords/plugs. The software that enables chargers and cars to "communicate" is the same in NACS and CCS1 chargers.
Shares of CHPT are up 6.49% in early trading Wednesday morning.