What Happened?
Shares of EV charging solutions provider ChargePoint Holdings (NYSE: CHPT) jumped 4% in the morning session after the stock benefited from a positive mood in the broader market and specific optimism within the electric vehicle sector. There was no major company-specific news released to account for the move. However, the EV charging sector received a boost after competitor Blink Charging announced an expanded collaboration in Europe to increase its charging infrastructure. This type of expansion highlights the growing demand for EV charging solutions. Also, investors were expecting a heavy slate of earnings reports from major companies during the week. Notably, the earnings season got off to a strong start: More than 85% of the S&P 500 stocks that reported earnings exceeded expectations, according to FactSet data. This robust performance fueled positive sentiment, suggesting that corporate profitability remained resilient despite ongoing economic uncertainties.
After the initial pop the shares cooled down to $0.62, down 0.6% from previous close.
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What Is The Market Telling Us
ChargePoint’s shares are extremely volatile and have had 68 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 8 months ago when the stock gained 22.1% on the news that the company reported strong third-quarter results that exceeded analysts' revenue and EBITDA estimates. While sales declined year on year in the Networked charging systems business, the result came in well ahead of consensus estimates, indicating expectations were modest heading into earnings. However, the top line also benefited from strong double-digit growth in the subscription segment, which is more promising.
On the other hand, its full-year operating income guidance was lowered, showing that the growth is less profitable than expected. The market seems to be focusing more on the top-line successes, and the stock is up as a result.
ChargePoint is down 44.5% since the beginning of the year, and at $0.62 per share, it is trading 71.6% below its 52-week high of $2.19 from July 2024. Investors who bought $1,000 worth of ChargePoint’s shares 5 years ago would now be looking at an investment worth $61.33.
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