%ChargePoint Holdings (NYSE: $CHPT) is a micro-cap stock that is a big player in the %ElectricVehicle (EV) space.
Based in California, ChargePoint operates the world’s largest network of independent publicly used electric vehicle charging stations.
A few years ago, expectations were that public EV stations were going to replace gas stations, and CHPT stock was trading at $46 U.S. a share.
But shifting government policies, poor investments, and tepid consumer interest have largely stalled the electric vehicle revolution that was charging full steam ahead.
As a result, ChargePoint’s stock is currently trading at only $0.87 U.S. a share, making it a penny stock.
With a market capitalization of only $402 million U.S., ChargePoint is an ultra-small cap stock, commonly known as a micro-cap security.
While it’s certainly been tough sledding for ChargePoint in recent years, there might now be some reason for optimism with the company.
First of all, while growth has slowed, electric vehicle adoption around the world continues to rise, particularly in Europe where ChargePoint is a leading provider of public charging stations.
Also, the need for public EV infrastructure has not diminished. On the contrary, many analysts cite a lack of public infrastructure as a reason for the downturn in the electric vehicle sector.
Going forward, governments and industry will have to invest heavily in this area, which could benefit ChargePoint.
The company just reported financial results that, while mixed, contained some bright spots.
An earnings per share (EPS) loss of -$0.12 U.S. was better than a loss of -$0.13 U.S. that was expected among analysts.
ChargePoint said in its earnings release that its subscription revenue grew 14% year-over-year in the latest quarter, and that its gross margin improved to 29% from 22% a year ago.
Management also said they reduced operating expenses by 10% to $81.8 million U.S. and ended the quarter with $196.3 million U.S. of cash and no debt maturities until 2028.
And ChargePoint reaffirmed its commitment to achieving positive earnings at some point in the current fiscal year.
It definitely carries some risk, but an investment in ChargePoint today might electrify a portfolio in the future.
