Value Investing Memo: ChargePoint Holdings, Inc. (CHPT)

Investment Thesis

ChargePoint is a leader in EV charging infrastructure, with a large and growing network and recurring SaaS revenue. Despite its scale and strategic positioning, the stock has dropped ~50% over the past year and trades with low valuation multiples (EV/Sales ~1.1×). With EV adoption expected to continue globally—even amid short-term EV sales slowdowns—the combination of scale, cash runway, and future infrastructure investment positions CHPT as a potential long-term turnaround candidate.

Business Snapshot

  • North America and Europe network operator: >342K charging locations across 14 countries (investors.chargepoint.com)
  • Broad product suite: home, commercial, and fast DC chargers plus cloud software and analytics
  • Market leadership: ~70% share in North American Level 2 networked charging (investors.chargepoint.com)

Key Metrics (Q1 FY 2026 / Trailing 12-months)

MetricValue
Revenue (TTM)$407.7M
Gross Margin~25.8%
Operating Loss–$229.9M
Net Loss–$262.4M
Cash Balance~$200M (end Q1)
Expected Cash Burn<$50M over next three quarters
EV/Sales~1.11×
P/S Ratio~0.76×
Debt/Equity~2.8×
Institutional Ownership~36%
Beta (5‑yr)~2.24
Short Interest~19.8%
Forward P/E & PEGN/A (no expected profitability)

Valuation & Outlook

Low revenue base (~$408M) limits multiples; EV/Sales at ~1.1× indicates the market may be pricing in conservative expectations.

Negative earnings, so no P/E or PEG usable; losses are structural as the firm invests in expansion.

Cash runway: ~$200M on hand with <$50M expected burn over next year — capital-efficient but will likely need new funding by late 2026 if no path to breakeven.

Macro & Growth Drivers

  • EV infrastructure: Estimated $60B US and Europe cumulative charging investment by 2030, $192B by 2040 (zacks.com, investors.chargepoint.com)
  • EV sales slowdown (7% YoY growth in 2024) unsettles sentiment (barrons.com)
  • Partnerships: Expanded via Eaton and GM collaborations — logos of integrated hardware+power management

Risks

  • Growth drag: Recent revenue decline (Q1 at $98M vs. prior year $107M) (investors.chargepoint.com)
  • Macro slowdown: Slowing EV adoption and fading subsidies (e.g., US tax credits rollback) hitting momentum (barrons.com)
  • Capital needs: Continued EBIT losses may require funding dilutive capital raises or debt.

Risk/Reward Matrix

RiskReward
Ongoing losses; potential dilutionScale, network effects, and industry leadership
Funding risk if cash burns throughRecovery with EV adoption and margin improvement
EV sales/incentive dragLarge addressable market; macro tailwinds persist
High short interest (~20%)Potential for squeeze or sentiment swing

Catalysts

  • EV adoption rebound: New vehicle sales growth supporting charging demand
  • Network monetization: Gains in SaaS ARR or higher-margin services
  • Partnerships scaling: Further integration with fleets, utilities, OEMs
  • Profitability inflection: Even marginal progress on EBIT could re-rate valuation

Positioning Thoughts

High-risk, high-reward asymmetric trade — not a traditional value play.

May be considered suitable for a speculative turnaround bucket, entry under $1/share.

A staggered allocation approach could be considered, adding as EV/Sales expands >2× or partnerships materialize.

Exit consideration may be warranted if cash burn accelerates or core partnerships dissolve.

Summary

ChargePoint is a leading EV charging network operator with large-scale reach and recurring revenue potential. While current financials reflect investment mode with no profitability, the network position, partnerships, and industry growth could enable a meaningful inflection in coming years. It represents a speculative turnaround opportunity with potential upside if EV infrastructure rebounds — but may require conviction in the EV thesis and careful capital risk management.

Sources

Disclaimer: This article is for informational and educational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. The author is not a registered investment advisor. All opinions are the author’s own. Readers are encouraged to do their own research and consult with a licensed financial professional before making investment decisions.

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