ChargePoint Holdings (NYSE: CHPT) shares made a dramatic comeback in July and surged a whopping 43.7%, according to data provided by S&P Global Market Intelligence. That's a huge rebound for a stock that lost one-third of its value in the first half of 2024.
The electric vehicle (EV) charging infrastructure company was hitting the headlines for all the wrong reasons in recent months, including dwindling sales and margins. So what changed so dramatically for ChargePoint in July?
ChargePoint is trying to turn things around
ChargePoint operates the largest EV charging network in the U.S., and in July, it passed the milestone of 1 million charging points installed so far across North America and Europe. But the stock surged after the company announced management changes to "bolster expertise in software-led EV charging."
While it also appointed a new chief development officer for software and a new member to its board of directors, investors' bet was on its new chief financial officer (CFO), Mansi Khetani. A C-suite shuffle typically raises investors' hopes for a company's turnaround. Khetani joined ChargePoint in 2018 and was appointed as its interim CEO in November 2023, around the same time Rick Wilmer became the company's new CEO.
ChargePoint stock also got a nice nudge in July alongside other EV stocks after several EV makers, particularly from China, reported strong delivery numbers for June. ChargePoint's success depends entirely on the demand for EVs and charging infrastructure. Fears of a global slowdown in the EV markets were a major reason ChargePoint stock took a hit in recent months.
Should you buy ChargePoint stock?
ChargePoint is a loss-making company, and its path to profitability depends almost entirely on the pace of adoption of EVs and electrification in the transportation sector. In between, competition is getting fierce, especially from Tesla, which is building out its supercharging network and opening it to non-Tesla EVs.
The dual challenge of a slow EV market and rising competition has already hit ChargePoint's operational performance -- the company reported an 18% drop in revenue year over year for its fiscal first quarter of 2025 (ended April 30). Worse yet, its second-quarter guidance calls for an drop in year-over-year revenue of almost 25% at the midpoint.
Given the backdrop, there's little to justify the massive jump in ChargePoint's stock in July. I'd call it a dead cat bounce and expect the stock to remain volatile. In fact, it has already lost 20% value in August, as of this writing. Ouch.
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Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
