ChargePoint Surges Despite Deep EPS Miss on Strong Revenue, Guidance
Shares climb as investors focus on a 6% revenue beat, improving margins, and a $172 million debt reduction, looking past a significant quarterly loss.
ChargePoint Holdings Inc. (NYSE: CHPT) shares rose in after-hours trading Wednesday after the electric vehicle charging network reported mixed third-quarter results that saw a significant earnings miss but offered investors promising signs of operational progress and a stronger-than-expected forecast.
Investors appeared to focus on the positive, sending the stock up more than 2% to $8.52. The move came after ChargePoint posted revenue of $105.7 million for the quarter, comfortably beating analyst consensus estimates of $96.5 million and marking a 6% increase year-over-year. The company also raised its fourth-quarter revenue guidance to a range of $100 million to $110 million, surpassing the Wall Street consensus of $96.5 million.
However, the top-line strength was paired with a substantial bottom-line loss. The company reported a loss of $2.23 per share, missing consensus estimates of a $1.31 per share loss by a wide margin. The significant miss underscores the ongoing challenge for the EV infrastructure leader to translate revenue growth into profitability in a highly competitive and capital-intensive market.
Despite the loss, other key financial metrics showed signs of stabilization and strategic progress. Gross margins improved to 31% from 23% in the same quarter last year, a development that suggests increasing efficiency and pricing power. This was a key area of focus for investors looking for a path to sustainable profitability for the Campbell, California-based company.
Adding to the positive sentiment was the company's recent move to shore up its balance sheet. ChargePoint announced it had successfully reduced its debt by $172 million through a privately negotiated exchange. This deleveraging effort is a crucial step in providing the company with greater financial flexibility as it navigates the build-out of its global charging network.
The market's reaction suggests investors are weighing the forward-looking guidance and operational improvements more heavily than the historical quarterly loss. The bullish revenue forecast indicates management's confidence in near-term demand and its ability to execute on its growth strategy, even amid broader economic uncertainties that could temper consumer and commercial EV adoption.
Prior to the earnings announcement, analysts held a cautious consensus on ChargePoint, with a majority rating the stock as a 'Hold'. The average analyst price target stood at $11.69, suggesting potential upside but reflecting concerns over the company's cash burn and timeline to profitability. The strong guidance and debt reduction could prompt some analysts to revisit their models, though the steep EPS miss will likely remain a point of concern.
ChargePoint, a key player in the EV infrastructure space, has seen its stock navigate a volatile path. Shares have traded between a 52-week high of $30.00 and a low of $7.30 as the market digests sector-wide competition, supply chain pressures, and the pace of EV adoption. The third-quarter results provide a complex picture: a company beating sales expectations and improving its financial health, yet still struggling to control losses. The path forward will depend on its ability to continue this top-line momentum and margin expansion while reining in costs to finally deliver on its long-term promise of profitability.