ChargePoint: Bringing ICE Age Fleets Into the Electric Future

In June, ChargePoint (CHPT) launched its fleet services solution, designed to facilitate fleet operators’ migration from using fossil fuels to electric batteries.

Needham’s Vikram Bagri believes the fleet electrification market “has vast potential,” and through 2030E, the analyst estimates it represents a ~$3 billion opportunity for the company. By then, ChargePoint could also generate recurring fleet cash flows of up to ~$300 million.

Recently, the analyst held a virtual event with some key company personnel, for an in-depth talk and demo of the new platform.

The company believes its fleet offerings match its “land and expand strategy.” This is based on a rationale of customers purchasing the hardware and software upfront, but as their fleet grows, they continue to purchase ChargePoint’s service offerings. Bakri was impressed, believing the company has “an industry leading fleet product.”

“They offer a turnkey fleet electrification service with integrated software, sophisticated hardware, design/build services as well as technical support and O&M through their leading Assure platform,” the analyst further said.

But the new service offering is complimented by recent acquisitions.

Earlier this month the EV charging network operator completed its acquisition of European e-mobility technology provider which closely followed the purchase of ViriCiti, a leading European electric fleet management company. Both are “key to achieving the company's LT ambitions in EU as well as targets for the fleet segment.”

While fleet vehicles only represent a miniscule 3% of all U.S. vehicles, they offer a massive opportunity in the EU, where they account for roughly ~20% of all vehicles. The company also stands to benefit from government incentives and initiatives and Bakri believes his estimates could yet prove conservative should ChargePoint expand beyond the US and EU and EV adoption rates pick up.

Overall, Bagri rates ChargePoint a Buy and his $35 price target implies a strong 77% upside potential. (To watch Bakri’s track record, click here)

The rest of the Street takes a similar view where the share price is concerned; going by the $34 average price target, shares will gain ~71% in the year ahead. Rating wise, most are backing CHPT’s success, though support is not unequivocal; based on 7 Buys, vs 3 Holds and 1 Sell, the stock qualifies with a Moderate Buy consensus rating. (See CHPT stock analysis on TipRanks)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.