In its merger presentation, it modeled results through fiscal 2027. They have also generally released detailed models on how those trends will play out.ĬhargePoint was no exception. Every SPAC - particularly in the EV space - is targeting exponential revenue growth and substantial margin expansion. There are fears that pie-in-the-sky projections by so many companies that are merging with SPACs have helped create a bubble. Companies with IPOs generally cannot do that. One of the key distinctions of SPAC mergers versus traditional initial public offerings is that SPACs can make financial projections after a merger deal is made. Switchback became ChargePoint, trading under the symbol CHPT, after the companies’ merger closed late last month. Perhaps the most important aspect of the results for CHPT stock will be the company’s outlook for 2021 and potentially beyond.Īfter all, ChargePoint also went public via a SPAC, Switchback Energy. Either way, those numbers won’t make or break the company’s long-term story.
And modest moves in operating expenses or even gross margin can, as I suggested earlier, be due to short-term factors. The company is investing in its business, as it should. Meanwhile, as far as the bottom line goes, ChargePoint is going to post a loss. Even the gain or loss of an order or two by ChargePoint last quarter may materially change its Q4 results. Single-quarter results have a great deal of variability in that situation. CHPT stock isn’t going to move solely, or possibly at all, based on whether its Q4 numbers beat or miss analysts’ average expectations.Īfter all, the company’s business and market are still young. Next week’s release is not necessarily going to be about the company’s fundamentals in the traditional sense. The potential of the space is enormous - one analyst thinks EVs can become a $5 trillion market globally - but there’s still work left to do.ĬhargePoint needs to start that work next week. Just as importantly, the industry has not yet built credibility. The optimism towards the EV sector has clearly faded. And both ChargePoint and the owners of CHPT stock hope its Q4 release can reverse, or at least stem, that tide of selling. So, obviously, sector weakness is a big factor in CargePoint’s trading.
Many other names in the EV sector, including Blink Charging (NASDAQ: BLNK), TPG Pace Beneficial Finance (NYSE: TPGY), a SPAC that has announced a tie-up with Europe’s EVBox, and even Tesla (NASDAQ: TSLA) have all fallen sharply in recent weeks. Source: Nick Starichenko/ĬhargePoint stock has tumbled 40% in the last month.ĬhargePoint isn’t alone.
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