Why ChargePoint Shares Dropped Friday
What happened
Electric vehicle (EV) charging network company ChargePoint Holdings (NYSE: CHPT) gave investors a mixed fiscal 2023 second-quarter earnings report earlier this week. After initially charging more than 16% higher after that report, the stock is down 4.6% today as of 2:45 p.m. ET. It has now given back virtually all of the post-earnings gains.
So what
There hasn't been any negative news subsequent to the release. In fact, a small bit of news that came out yesterday would seemingly be positive for the company. The quarterly report had some positive news itself. ChargePoint exceeded the high end of its prior guidance for revenue. The company had told investors to expect revenue of between $96 million and $106 million for the period, and it achieved $108.3 million in sales. But while that represented a 93% jump compared to the prior-year period, ChargePoint's losses grew compared to the previous year. Its net loss of $92.7 million was nearly $8 million more than it lost in its year-ago period.
Image source: ChargePoint Holdings.
Now what
One thing that may have caused investors to reverse the initial gains was the company's full-year outlook. That didn't change, which signals that it could potentially underperform prior forecasts through the balance of the year. It could also just be a prudent move by management to keep analyst expectations in check.
Subsequent to its earnings release, ChargePoint announced that CEO Pasquale Romano has been appointed by President Biden to serve as a member of the National Infrastructure Advisory Council (NIAC). As part of a council that will advise the president on the transition to electric mobility, Romano is in a good position to ensure the company is in the right places to take advantage of that infrastructure buildout.
Like most EV investments, ChargePoint will be a long-term story. While the stock gave up its gains this week, its growing revenue is a good sign for the company and investors.
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Howard Smith has positions in ChargePoint Holdings Inc. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
