Down roughly 20% since the start of the year, ChargePoint (CHPT +0.48%) stock has clearly failed to charge up investor excitement in 2024 as the S&P 500 has soared almost 7%. In fact, this EV charging infrastructure stock has been consistently powering down over the past year -- a period during which it has fallen more than 80%. At least two analysts think that the stock is bound to bounce higher, but not as much as they had preciously thought. Chris Pierce, an analyst at Needham, and Jaime Perez, an analyst at R.F. Lafferty, both recently reduced their price targets on ChargePoint stock to $3 from earlier price targets of $4. The stock closed Tuesday at $2.
NYSE: CHPT
Key Data Points
A weak wrap to the end of one fiscal year...and the start of the next
Both analysts predicated their lower price targets on ChargePoint's disappointing fourth-quarter and fiscal 2024 financial results, released Tuesday afternoon. While ChargePoint grew revenue 8% from fiscal 2023 to 2024, the company suffered from declining profitability. The company's 6% gross margin in the year ended Jan. 31 was sharply lower than the 18% gross margin that it reported in the previous year. Similarly, the bottom of the income statement also reflected a decrease. Net income declined from negative $345 million to negative $458 million.
Additionally, management's uninspiring guidance for the first quarter of fiscal 2025 also motivated analysts to drop their price targets. ChargePoint projects first-quarter sales of $100 million to $110 million. Should the company achieve the midpoint of this forecast, it would represent a year-over-year decline of 19%.
Watch this charging stock from the side of the road
With the evident ebb in demand for EV cars and the disappointing first-quarter guidance, it's unsurprising that analysts see less upside for ChargePoint stock. If anything, it seems that analysts should've dropped their price targets even lower as it's unlikely that ChargePoint stock will bounce back to the level it was at in late 2023 unless the company's able to expand its gross margin and get back on the road to profitability.
