ChargePoint Holdings Inc (NYSE:CHPT) is surging in early trading on Thursday, after the company reported its second-quarter results.
Despite the challenging US EV landscape, the company continued to execute well with "effectively zero cash burn," according to Needham.
The ChargePoint Analyst: Analyst Chris Pierce reaffirmed a Hold rating on the stock.
The ChargePoint Thesis: With inventory reductions, the company’s profitability outlook continues to improve, "supporting modest cash usage through year-end," Pierce said in the note.
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ChargePoint reported revenue above the high end of its guidance, while underlying gross margins improved in the quarter, the analyst stated.
Normalized gross margins reached around 35% despite no significant contribution from Express, he added.
The company’s quarterly operating expenses are likely to remain below $50 million for the remainder of fiscal 2027, which supports continued improvement in adjusted EBITDA losses, the analyst noted.
"The Asian manufacturing transition is largely complete, with further margin upside expected from new, structurally lower cost products including Express," he further wrote.
The Overhang: "US EV adoption remains the key macro overhang," as ChargePoint has high exposure to the North American market, which represents around 82% of its total revenue, Pierce said.
The second-quarter revenue beat was driven in part by stronger home charging sales in North America rather than by an inflection in the core commercial business, the analyst noted.
The company needs a meaningful acceleration in US EV penetration to drive sustained revenue growth, he added.
"While commercial demand appears to have stabilized, we continue to wait for evidence of a stronger recovery in the company’s largest and stickier customer vertical," Pierce further wrote.
CHPT Stock Price Activity: ChargePoint Hldgs shares were up 60.31% at $8.32 on Thursday, according to Benzinga Pro data.
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