ChargePoint is a technology company and is on its way to becoming a utility-like company. It is positioned to capture a large chunk of the demand for EV charging stations.
ChargePoint recorded promising numbers in the most recent earnings release:
– 93% revenue increase in Q4 compared to Q4 of the prior year. With total assets increasing by 26% during this time, this hints at accelerating revenue growth with efficiency.
– 94% revenue increase in fiscal year comparison. Given the increasing cost of capital during this period, it is an impressive result.
– 4% shrinkage in gross margins year over year (YoY). There can be many reasons, though, with high inflation and increasing cost of capital, it is reasonable to expect shrinkage of gross margin. Still, it is a cause for concern and needs to be monitored closely.
– Approx. 70% of the total assets are liabilities (total liabilities) and a slightly fewer percentage of assets are categorized into current assets. This indicates that the company’s balance sheet looks to be relatively healthy.
The company has not made a profitable year since 2018. However, with fiscal policies supporting EV infrastructure and the increasing volume of EVs on the road, the support and demand for charging stations look to only increase in the long term.
Other considerations: It was founded in 2007. They are not new to the industry and have been operating charging stations before the EV boom. The CEO Pasquale Romano has been with the company for a decade and has a good track record of leadership positions.
Given the above, ChargePoint should be considered a worthy candidate for an ESG fund and warrants further analysis. The companies operating in this business should be considered for impact investing as well. Putting your money into companies that are striving to promote the electrification of cars will have an impact on their growth and development of the industry overall.
Disclosure: this is not a recommendation to purchase shares of the company but a quick summary of the earnings results and accompanying opinion on the metrics.
