UBS has downgraded ChargePoint Holdings (NYSE:CHPT) to a Neutral rating (From Buy)and cut the 12-month price target on the stock to $2.25 (From $9.00) as the company’s topline trajectory has become “less clear”.
CHPT maintains its position as the primary shareholder in the U.S. for Level 2 (L2) charging ports. With a market share increase this year, the company now holds 44% of the publicly accessible installed base in the U.S.
However, CHPT’s extensive customer base presents an opportunity to further align its revenue growth with EV deliveries and sales.
In the event of reduced deliveries, CHPT is likely to experience a more significant impact compared to its competitors with lower shares in the L2 market.
UBS has cut FY24 and FY25 revenue estimates to $515MM and $611MM (From $628MM and $851MM), respectively.
While CHPT acknowledged weaknesses within its Fleet division, this stands in contrast to competitors like BLNK, who emphasized the end-market as a stronghold.
Anticipating a more challenging competitive landscape, UBS is expecting increased pressure on CHPT's market share within the fleet sector.
Timing for the company’s breakeven point has also become less certain. UBS analysts have pushed breakeven estimates on adjusted EBITDA estimates by one year to FY27 from FY26.
“While we view management changes as a potential positive development, we will be looking for updates on the go forward strategy and path to breakeven EBITDA”, wrote the analysts at UBS in a note.
“We expect CHPT to post its first breakeven adj EBITDA quarter in fiscal 4Q26, and post positive adj EBITDA for fiscal year 2027, vs our prior estimate for FY26.”
Shares of CHPT are down 0.50% in pre-market trading on Tuesday.