The market has practically destroyed ChargePoint (NYSE:CHPT) stock, so could it be a good contrarian bet in December? Maybe it is, as ChargePoint’s C-suite turnover presents the company with a timely opportunity to change and grow.
If you truly believe in the electric vehicle revolution, then ChargePoint stock offers an intriguing picks-and-shovels play because EVs will all need to be charged regularly. Yet, neither investors nor analysts are enthusiastic about ChargePoint. I’m not massively bullish, but risk-tolerant traders might want to take a look at ChargePoint for a potential turnaround.
Wall Street Doesn’t Love CHPT Stock
ChargePoint stock has lost most its value this year, and it’s hard to find experts on Wall Street who are very bullish about the stock. InvestorPlace contributor Josh Enomoto did an excellent job of summarizing the bearish takes of analysts from TD Cowen and Roth MKM.
To those, I’ll add some more examples. First, UBS analysts downgraded CHPT stock from “buy” to “neutral” and drastically reduced their price target on the shares from $9 to $2.25. Meanwhile, Oppenheimer analysts dropped their rating on ChargePoint from “outperform” to “perform” and withdrew their $13 price target on the shares.
Needham analyst Chris Pierce on halved his price target on ChargePoint stock from $8 to $4. In addition, Bank of America analysts reiterated their “hold” rating on ChargePoint and issued a share-price target of $2.50.
I’ll admit, I’ve been wary of ChargePoint in the past. Yet, my contrarian alarm bells are ringing now. I suspect that the market is punishing ChargePoint while piling into “Magnificent Seven” stocks because investors are worried about high interest rates taking a toll on relatively smaller businesses.
ChargePoint Stock Traders Should Embrace Change
Change can be a good thing, especially when a company is struggling and could benefit from a different strategy. On the other hand, stock traders sometimes get nervous when they sense changes are happening.
ChargePoint stock investors shouldn’t fear change. Frankly, it’s unreasonable for Oppenheimer analyst Colin Rusch to cite ChargePoint’s “management transition” as a reason to downgrade the stock.
Rusch declared ChargePoint is undergoing a “painful transition.” To that, I say, “No pain, no gain.” ChargePoint just installed Rick Wilmer as its new CEO and Mansi Khetani as the company’s interim chief financial officer (CFO).
Putting Wilmer in the driver’s seat could mark a new and better chapter in ChargePoint’s story. As the company reported, Wilmer “has completed a thorough analysis of ChargePoint’s supply chain, manufacturing partnerships and inventory management approach.”
Wilmer is unafraid to enact meaningful change at ChargePoint. Hopefully, the company can achieve Wilmer’s objective of “generating positive adjusted EBITDA in the fourth quarter of calendar 2024.”
Give CHPT Stock a Try, if You Dare
There’s no guarantee that ChargePoint will deliver better results in the coming quarters under Wilmer’s leadership. However, at least there’s some hope now that ChargePoint stock can stage a comeback at some point.
Besides, with CHPT stock recently hitting $2, it’s so beaten-down and the sentiment is so tepid that there may be a prime contrarian play here. Therefore, speculative traders might consider a very small share position in ChargePoint.
On the date of publication, David Moadel 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.
