Factors Shaping the Fate of ChargePoint's (CHPT) Q3 Earnings

ChargePoint Holdings CHPT is slated to release third-quarter fiscal 2022 results (ended Oct 31, 2021) on Dec 7, after the closing bell. The company started trading on the NYSE under the ticker CHPT on Mar 1, 2021, following the completion of its previously-announced business combination with Switchback Energy Acquisition Corporation. Hence, since becoming a publicly-traded company, the fiscal third-quarter results will be its third quarterly earnings report.

The Zacks Consensus Estimate for its bottom line is pegged at a loss of 13 cents per share for the quarter.

The company posted a wider-than-anticipated loss in the last reported quarter. The Zacks Consensus Estimate for ChargePoint’s fiscal third-quarter loss per share has remained unchanged in the past 90 days.

ChargePoint Holdings, Inc. Price and EPS Surprise

ChargePoint Holdings, Inc. Price and EPS Surprise

ChargePoint Holdings, Inc. price-eps-surprise | ChargePoint Holdings, Inc. Quote

Earnings Whispers

Our proven Zacks model does not conclusively predict an earnings beat for ChargePoint this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that is not the case here, as elaborated below.

Earnings ESP: ChargePoint has an Earnings ESP of -2.27%. This is because the Most Accurate Estimate for loss is a cent wider than the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: ChargePoint currently holds a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors at Play

ChargePoint’s fiscal third-quarter top line is anticipated to have benefited from growing demand for its cloud subscription platform and software-defined charging hardware, which are designed to include options for every charging scenario (home, workplace, parking, hospitality, retail, transport fleets, and more). The company expects fiscal third-quarter revenues in the band of $60-$65 million, while the Zacks Consensus Estimate for the same is pegged at $63.08 million.

Amid rising electric vehicle (EV) penetration and sustained economic recovery, ChargePoint’s business is likely to have witnessed significant growth during the quarter under discussion. During the quarter under review, ChargePoint completed the acquisition of has·to·be— an e-mobility provider with a leading European charging software platform. This acquisition will further accelerate the company’s position in Europe's charging ecosystem. Further, in August, ChargePoint announced the acquisition of ViriCiti, a leading provider of electrification solutions for eBus and commercial fleets with a customer base in Europe and North America. The combined acquisitions of has·to·be and ViriCiti along with ChargePoint’s existing broad portfolio of charging infrastructure solutions provides the company with a complete set of solutions for electrified fleets in Europe and North America, thereby fortifying its leadership position in the EV charging market. This is likely to have aided the company’s performance in the to-be-reported quarter.

However, ChargePoint is facing rising operating costs as it is still in the early stages of development. Elevated research and development (R&D) expenses are expected to have dented its fiscal third-quarter margins. Also, intense competition from other charging networks provided by companies including Tesla, Volkswagen and EVgo EVGO are likely to have eaten into some revenues of the firm, thereby impacting the company’s fiscal third-quarter performance.

Peer Releases

Key peers ofChargePoint include EVgo, Beam Global BEEM and Romeo Power RMO.

EVgo reported third-quarter 2021 results on Nov 10. It posted a loss of 49 cents a share, wider than the Zacks Consensus Estimate ofa loss of 8 cents. Revenues of $6 million jumped 73% year over year and outpaced the consensus mark of $5 million.

The Zacks Consensus Estimate for EVgo’s2022 earnings implies year-over-year growth of 44.9%. EVGO currently carries a Zacks Rank #3. Its shares have rallied 8.4% in the past year.

Romeo Power reported third-quarter 2021 results on Nov 15. It posted a loss of 20 cents a share, on par with the Zacks Consensus Estimate. Revenues of $5.8 million jumped 753% year over year and surpassed the consensus mark of $2 million.

This Los Angeles-based energy technology company surpassed earnings estimates in two of the trailing three quarters and was on par in one, with the average negative surprise being 25.4%. The Zacks Consensus Estimate for Romeo Power’s 2021 earnings implies year-over-year growth of 101.85%. Romeo Power currently carries a Zacks Rank #2. Its shares have declined 78.6% in the past year.

Beem Global reported third-quarter 2021 results on Nov 11. It posted a loss of 19 cents a share, wider than Zacks Consensus Estimate by 3 cents. The reported loss was wider than the year-ago loss of 17 cents a share. Revenues of $2 million rose 63% year over year but lagged the consensus mark of $3 million.

This San Diego-based company missed earnings estimates in three of the trailing four quarters and surpassed once, with the average negative surprise being 48.51%. The Zacks Consensus Estimate for Beem Global’s 2021 and 2022 earnings implies year-over-year growth of 14.29% and 16.67%, respectively. BEEM currently carries a Zacks Rank #2. Its shares have declined 25.8% in the past year.

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