ChargePoint Holdings Inc. (CHPT) shares hit a new all-time low Tuesday, continuing a slide that's erased what looked like a promising recovery just weeks ago. There's no company-specific news driving the decline, which makes it all the more telling about where investor sentiment has landed.
The Turnaround That Wasn't
Here's the thing about ChargePoint's recent trajectory: the stock initially jumped over 25% in early December after the electric vehicle charging network company reported third-quarter revenue of $105.67 million, beating the consensus estimate of $96.71 million. CEO Rick Wilmer talked up a "return to growth" and highlighted $172 million in debt reduction. For a moment, it looked like the company might be turning a corner.
That optimism has evaporated. The current sell-off suggests investors are now focusing on what analysts warned about all along: the turnaround faces significant headwinds, and beating revenue expectations doesn't fix the fundamental problems.
The Loss That Matters
Despite the revenue beat, ChargePoint reported a wider-than-expected adjusted loss of $2.23 per share for the third quarter, badly missing the analyst estimate of $1.31. That's the kind of miss that makes people rethink the whole story, and analysts responded accordingly. RBC Capital and Roth Capital lowered their price targets to $9 and $8.50, respectively, while JPMorgan reiterated an Underweight rating.
The market is clearly siding with the skeptics here. Analysts have noted that ChargePoint is unlikely to see meaningful margin improvement for several quarters and faces risks from tapering U.S. demand for EVs. There are also potential headwinds from changes to tax credits that could impact the broader sector. Tuesday's slide suggests the market is pricing in these longer-term challenges rather than celebrating the better-than-expected revenue from earlier this month.
Technical Weakness Piles On
The technical picture isn't helping matters. Market data shows a low momentum score of 1.45 for the stock, with negative price trends across short, medium, and long-term horizons. In other words, things aren't looking great on any timeframe you choose to examine.
CHPT Price Action: ChargePoint shares were down 4.84% at $6.94 at the time of publication Tuesday, marking a new 52-week low. The stock faces critical support around the $6.90 level, which was the low for the session. If that support fails to hold, there could be further downside potential. Conversely, resistance is likely around the $7.20 mark, where sellers may step in to cap any short-term rallies.
