Yahoo Finance Why ChargePoint (CHPT) Shares Are Sliding Today
What Happened:
Shares of EV charging solutions provider ChargePoint Holdings (NYSE:CHPT) fell 19.9% in the morning session after the company reported second-quarter earnings results, with revenue and EPS missing analysts' expectations. Notably, revenue fell 28% y/y due to lower hardware sales. The weakness was concentrated in the network charging systems segment. The company observed delays in fleet deals due to permitting and construction challenges.
On the other hand, the subscription segment did the bulk of the heavy lifting during the quarter, with sales up 21% y/y. Moving on to profitability ratios, while gross margin ticked up slightly, the company recorded operating losses and cash burn. To stem the decline, the company highlighted cost cutting measures and noted that the quarter represents "the bottom of the trough" for revenue growth and EBITDA loss, and expects to be adjusted EBITDA positive by FY'26.
Regardless, inventory levels are expected to remain elevated through the end of the year but may begin decreasing around Q1 or Q2 due to challenging macro conditions. Looking ahead, it wasn't a surprise that its sales outlook for the next quarter fell short, with the outlook provided by management factoring in the highlighted macro concerns.
Overall, this quarter could have been better, and the stock's reaction suggests markets are likely not convinced about the near-term outlook.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy ChargePoint? Access our full analysis report here, it’s free.
What is the market telling us:
ChargePoint’s shares are very volatile and over the last year have had 91 moves greater than 5%. But moves this big are very rare even for ChargePoint and that is indicating to us that this news had a significant impact on the market’s perception of the business.
ChargePoint is down 33.9% since the beginning of the year, and at $1.44 per share it is trading 80.2% below its 52-week high of $7.26 from September 2023. Investors who bought $1,000 worth of ChargePoint’s shares at the IPO in September 2019 would now be looking at an investment worth $146.86.
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