In 2021 the whole EV sector is expected to slow down as investors book profits and lower-value stocks return into favour.

This has made major players like Tesla (NASDAQ:) struggle to find their mojo. ChargePoint (CHPT), however, has been the focus of attention when it comes to EV-charging stocks.

ChargePoint Holdings was founded in 2007 and has built one of the largest EV charging networks worldwide. CHPT offers three types of services. There are three types of products: Residential Products, Commercial Products and Fleet Products. The company makes its money from these three areas: software, labor, parts, and hardware.

It can be seen by CHPT as an EV play relatively unknown that enjoys a small market. This stock is a good investment. This stock has remained very expensive despite falling more than 60% since its peak. Accordingly, I remain neutral on CHPT stock.

Now let’s look at what has sparked so much positive sentiment regarding CHPT stock. Any stock that falls so much from its peak merits a second look by growth investors. (See Insiders’ Hot Stocks on TipRanks)

EV Infrastructure Outlook

Electrification has been a catalyst for many drivers making the shift to electric vehicles. However, most EVs only can travel between 125 and 250 miles with a single charge.

This range is improving, but charging stations are an essential reality for owners of EVs who want to take longer trips.

ChargePoint leads the charge in addressing this issue for electric vehicle owners. ChargePoint’s incredible 30,000 charging points is truly amazing. ChargePoint, the leading EV charging stock in the world, is worth considering if you are optimistic about the worldwide adoption of EVs.

Expectations for an increase in investment in EV charger infrastructure are very positive. The cumulative EV charging infrastructure investment in Europe and the U.S. is anticipated to be $192 billion by 2040, and $60 billion by 2030.

Several cities and 10 European countries have announced plans to prohibit the sale of internal combustion engines automobiles in their communities by 2035. American automakers expect that around 50% of their vehicle sales by 2030 will come from electric vehicles. EVs could account for around 10% of all automotive sales by 2025. 

Although EVs make up only around 2.6% in the global vehicle market, it is predicted that they could account for approximately 30% in 2030.

This projection will become a reality if a large connected network is established of EV charging stations. ChargePoint is a leader in this space of hyper-growth.

ChargePoint’s Cores Look Solid

Recent earnings reports show that the company has experienced strong growth. On a 12-month basis, revenue grew 61%.

Network charging revenues increased by 91%, reaching $40.9 million. ChargePoint also ended the quarter with $618.5million in capital remaining to deploy. This capital is largely related to ChargePoint’s recent IPO.

Wall Street analysts believe that CHPT stock may double due to these numbers. It remains to be seen how ChargePoint will use this capital in order to return shareholders.

But, it remains positive about its revenue forecasts. For the coming quarter, forward revenue projections for the company range between $60-$65 million. This would be a quarter-overquarter increase between 7% and 15.9%.

Wall Street Take

TipRanks analyst rating consensus rates ChargePoint Holdings as a Moderate Buy. There are 7 Buy recommendations and 3 Hold recommendations. One Sell recommendation is included in the 11 analyst ratings. 

The average ChargePoint price target is $34. The average ChargePoint price target is $34. 

The Bottom Line

ChargePoint offers a strong growth prospect. However, it is important to price this company’s growth prospects appropriately. The market seems to have realized that there has been too much optimism in the stock price of this company over the last few months.

However, this stock is attractive to aggressive growth investors.

Disclosure: Chris MacDonald didn’t hold any positions in the securities listed in this article at the time it was published.

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