ChargePoint Stock Plummets. Higher Interest Rates Sting.

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Stock in
ChargePoint,
a leading electric-vehicle charging equipment maker, was plunging Friday after the company reported weak preliminary financial results and named a new CEO and CFO.

For its fiscal third quarter ended in October, ChargePoint (ticker: CHPT) said Thursday evening it expects sales between $108 million and $113 million. That is down sharply from the company’s prior guidance between $150 million and $165 million and far lower than Wall Street estimates for sales of $150 million.

It’s the second consecutive quarter with a sales miss. The struggles have led to some leadership changes. ChargePoint, the leading U.S. EV-charging company, said Thursday it had named former chief operating officer Rick Wilmer its new CEO, taking over immediately from predecessor Pat Romano. The company also said former senior vice president Mansi Khetani has taken over as CFO from Rex Jackson.

ChargePoint stock plummeted about 35% in trading Friday, while the
S&P 500
dipped 0.1% and the
Nasdaq Composite
fell 0.2%.

ChargePoint also said it is taking a $42 million noncash charge against earnings in its third quarter, but didn’t specify a reason in the release. ChargePoint declined to comment further, pointing out it was in a quiet period ahead of earnings, which the company reports Dec. 6.

Preliminary operating expenses came in as expected at about $80 million for the quarter. The company ended October with about $400 million of cash and an undrawn $150 million revolving credit facility.

“Our core markets of North America and Europe both came under pressure late in the third quarter, with revenue falling far short of expectations,” said Wilmer in a news release. “Overall macroeconomic conditions, along with fleet and commercial vehicle delivery delays impacted anticipated deployments with government, auto dealership, and workplace customers.”

Higher interest rates affect any builders’ ability and willingness to pay for and put in charging infrastructure. In that way, higher interest rates have slowed the economy, just like the Federal Reserve intended.

Its expected third-quarter sales of about $110 million at the midpoint of the company’s range are much larger than the publicly traded competition.
Wallbox
(WBX) reported $33 million in third-quarter sales, while
EVgo
(EVGO) reported about $35 million.
Blink Charging
(BLNK) reported about $43 million in third-quarter revenue.
Beam
(BEEM) reported about $16.5 million.

ChargePoint stock has been badly beaten up heading into its third-quarter preliminary results. Coming into Friday trading, shares were off 75% over the past 12 months.

ChargePoint stock was downgraded to Hold from Buy at both Roth MKM and Janney Montgomery Scott following the update. Now about 74% of analysts covering shares rate them Buy. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. The average analyst price target is about $9 a share.

That ratio and target price will likely change more after this third-quarter update.

Write to Al Root at [email protected]

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