After a volatile month, ChargePoint Holdings (NYSE:CHPT) may be on the verge of turning around. The company is a leader in the field of electric vehicle (EV) charging. And while it hasn’t generated the best returns for investors in the short term, one Wall Street analyst is highly bullish on its long-term growth prospects.
According to Bank of America’s Alex Vrabel, CHPT stock has enough upside to more than double in price. In fact, his new price target of $14 implies 65% upside from Friday’s close. This may strike some as overly optimistic, given ChargePoint’s record of volatility. However, the analyst makes a strong case for it as a winner among stocks to buy for the EV revolution.
Does this mean that ChargePoint has finally turned the corner after its difficult year? It’s quite likely, given the company’s strong fundamentals and position in a booming market. Let’s take a closer look at why Vrabel and other experts are highly bullish on it.
What’s Happening With CHPT Stock?
After a week of minimal gains, CHPT stock has pulled back into the green following Vrabel’s bullish take. It began today by surging as markets opened and it hasn’t lost any momentum. As of this writing, it is up more than 12% for the day, and if its current trajectory is any indication, it is likely to keep rising steadily. InvestorPlace’s William White reports that it is experiencing heavy trading volume as enthusiasm from investors continues to mount.
Why does Vrabel’s team see CHPT stock as having so much upside potential? In a note to clients, the analyst issued the following statement:
“The reason for our upgrade is simple — CHPT has proof of execution, line of sight to profitability and with its story largely unchanged since the PIPE offering, valuation is compelling against shares making all-time lows. CHPT [is] a best-in-class way to play [the] EV charging theme.”
This take makes a lot of sense. Demand for electric vehicles is only growing. Recent data indicates that sales will likely increase by an additional 35% this year. While there are many options for purchasing an EV, far fewer companies are working to produce more chargers. Companies like ChargePoint operate in a lucrative market that still isn’t oversaturated.
On top of that, CHPT stock has outperformed most of its smaller competitors. While it has surged 13% over the past month, companies like Blink Charging (NASDAQ:BLNK) and EVgo (NYSE:EVGO) have failed to garner any real momentum. Both EV charging stocks are in the red while ChargePoint pulls away, leaving them and its other smaller-cap peers in the dust. All three companies have growth potential, but it’s clear that CHPT stock is the undisputed winner.
Why It Matters
ChargePoint’s performance over the past two quarters may make some investors nervous. But for all its volatility, its important to remember that CHPT stock is still up more than 5% year-to-date (YTD).
As InvestorPlace contributor Muslim Farooque notes, while the company is still facing market headwinds, it is well-positioned to keep growing until it reaches profitability. ChargePoint has the type of global presence that no other company in the EV charging space can compete with right now. Specifically, it operates in 14 different countries, and that list is likely to grow.
All this suggests that Vrabel’s bullish thesis is correct. In fact, CHPT stock may well be on the fast track to exceeding $14 per share.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
