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ChargePoint stock price forecast: Sell the rip

ChargePoint Holdings

The ChargePoint (NYSE: CHPT) stock price plunged by more than 10% in extended hours after the company published weak earnings. It plunged to a low of $10, which was lower than its closing price of $11.26. Like other EV stocks, the shares have plunged by more than 77% from its all-time high.

ChargePoint weak guidance

ChargePoint is a leading player in the EV technology industry. It provides charging stations across the US, where it serves individuals and businesses. Most of its revenue comes from its commercial agreements followed by fleet and residential. 

In a statement, the firm said that its revenue jumped by 93% in the fourth quarter to over $153 million. This increase was lower than its guidance of between $160 million and $170 million. Its subscription revenue came in at $26 million and represented about 17% of its total revenue. 

The other important catalyst for the ChargePoint stock price was its revenue guidance. The firm expects that its revenue will come in at between $122 million and $132 million. This will be a 56% year-on-year increase. ChargePoint has over $400 million in cash, which is a few points above its previous $398 million. 

ChargePoint faces numerous challenges going forward. The biggest issue is that its business is not yet profitable. It lost over $78 million in the fourth quarter after losing over $60 million in the same quarter in 2021. The management attributed the higher losses to stock-based compensation. For the year, ChargePoint’s losses mounted to over $344 million from the previous $132 million. 

The company faces significant challenges going forward even as the number of EVs in the US rises. For one, it needs to generate meaningful profits as competition in the industry rises. 

ChargePoint stock price forecast

ChargePoint stock price

CHPT stock by TradingView

The daily chart shows that the CHPT stock price has been in a tight range in the past few days. This decline saw it form a small double-top pattern at $13.56 whose neckline was at $11. In most periods, a double-top pattern is usually a bearish sign. It has also moved below all moving averages while the MACD indicator has continued pulling back.

Therefore, the ChargePoint share price will continue falling as sellers target the next key support level at $8.50, the lowest point on December 28. A break below that level will open the possibility of the shares plunging to $7.

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