According to Fortune Business Insights, the global electric vehicle (EV) charging station industry is estimated to grow at a CAGR of 30.26% between 2021 and 2028, reaching $111.9 billion in the final year. The increasing number of EVs on roads and beneficial government policies should support the industry’s growth in the long term.
In addition, the recently signed infrastructure bill would spend about $7.5 billion for electric vehicle charging stations in the U.S. This has attracted investor attention to the EV infrastructure space, as can be evidenced by the Global X Autonomous & Electric Vehicles ETF’s (DRIV) 27.37% gains over the past year.
With this in mind, today I will analyze and compare two EV charging stocks:
ChargePoint Holdings, Inc. (CHPT) and Volta Inc. (VLTA). CHPT offers EV charging networks and charging solutions in the U.S. VLTA, which went public through a SPAC merger with Tortoise Acquisition Corp. II on August 27th, operates a network of EV charging stations in the U.S. Over the past six months, CHPT plunged about 45% and VLTA has fallen 27%.
On December 8th, Oppenheimer analyst Colin Rusch remained bullish on ChargePoint after the company had delivered mixed Q3 results. The analyst noted strong growth across all segments and a solid recurring revenue figure. The firm maintains its Outperform rating for CHPT with a price target of $40.
On December 6th, Volta disclosed its expansion plans into the European market, entering primarily Germany, Austria, Switzerland, and France. The company’s Europe center is backed by experienced local teams of EV charging hardware and software engineers, SaaS experts, and digital outdoor media sales leaders operating out of initial offices in Berlin and Paris. With the European EV market being fast-growing, this move should improve the company’s top and bottom line over the long term.
Recent Quarterly Performance & Analysts Estimates
On December 7th, ChargePoint reported earnings for the third fiscal quarter of 2022. Its total revenue rose 78.8% on a year-over-year basis to $65.03 million in FQ3, topping Wall Street estimates by $1.77 million. The company primarily collects revenue through two segments – Networked Charging Systems and Subscriptions. In FQ3, networked charging revenue rose 111% to $47.5 million, while subscription revenues stood 24% higher at $13.4 million. However, CHPT reported lower-than-expected GAAP EPS of ($0.21), missing by $0.05.
Also, ChargePoint has increased its FQ4 and full-year outlook. It expects to generate revenue of $73-$78 million in FQ4. The company’s full-year guidance was boosted to $225-$235 million.
In terms of the fourth-quarter projections, analysts expect ChargePoint’s earnings to rise 90.90% to ($0.16) per share. Besides, Wall Street projects its next quarter revenue to lift by 79.69% year-over-year to $76.17 million.
When it comes to Volta financials, its revenues advanced 77% year-over-year to $8.49 million in Q3. However, the company lacked to reach Wall Street consensus estimates of $10.1 million, missing by $1.57 million.
In Q3, the company’s net loss stood at $43.05 million compared to a $14.52 million loss in the year-prior period. Consequently, VLTA’s GAAP EPS has been reported at ($0.58), missing consensus by ($0.43). Its EBITDA loss was up 305% to $38.29 million versus a loss of $9.46 million in the year-ago quarter.
Currently, analysts expect VLTA’s earnings to be ($0.18) per share in the fourth quarter. Besides, Wall Street projects its Q4 revenue to advance 45.35% quarter-over-quarter to $12.34 million.
Comparing Options Market Sentiment
Looking at the January 21st, 2022 option chain for both CHPT and VLTA, we can define options market sentiment by analyzing the calls/puts ratio. In CHPT’s case, the open calls/open puts ratio at the $20.00 strike price comes in at 2.29x, implying a bullish options market sentiment. When it comes to VLTA, the open calls/open puts ratio at the $7.50 strike price stands at 1.67x, showing a relatively weaker bullish market sentiment.
Putting it all together, I believe CHPT is currently a better investment than VLTA. Although CHPT stock was sold-off after earnings, the company improved its main operating metrics and boosted guidance. Besides, CHPT’s financials and forward growth rates look better. Finally, CHPT has better options market sentiment at the moment.
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CHPT shares were trading at $19.27 per share on Tuesday afternoon, down $0.60 (-3.02%). Year-to-date, CHPT has gained 1.15%, versus a 0.32% rise in the benchmark S&P 500 index during the same period.
About the Author: Oleksandr Pylypenko
Oleksandr Pylypenko has more than 5 years of experience as an investment analyst and financial journalist. He has previously been a contributing writer for Seeking Alpha, Talks Market, and Market Realist. More...
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