The focus on SaaS is clear because of its much higher margin profile. The company doesn't operate charging infrastructure, but it sells its charging systems to its customers and attaches them with its recurring subscription-based SaaS model. ChargePoint Is Focusing On Its Higher-Margin SaaS BusinessĬhargePoint has telegraphed its plans clearly from the start that it sees itself as a SaaS-focused company. Therefore, we are prepared to upgrade it to Buy, based on a marked improvement in its risk/reward profile. Consequently, the stock is now very close to our implied fair value (+/- 10%). Since those articles were published, it has declined 46% and 27% (appended here and here), respectively. We also issued two Neutral calls previously on CHPT stock as we considered it too pricey then. Therefore, we believe that there are potential opportunities for leaders like ChargePoint to leverage if they can execute well moving forward. Moreover, even though the automakers are keen to operate and monetize their own charging infrastructure, they can't do this alone, given the size of the EV TAM. However, the secular drivers underpinning the EV charging leaders remain intact. Given its focus on growth over profitability, investors continued to bail out for proven quality. Nevertheless, the significant correction in high-growth plays has also impacted CHPT stock. As a company still early in its EV charging market opportunity, it also garnered huge interest among investors. The stock has also breached a critical support level that it has firmly held since it completed its SPAC combination in February'21. Sellers continue to take control of ChargePoint Holdings' ( NYSE: CHPT) stock performance. Robertcicchetti/iStock Editorial via Getty Images Investment Thesis
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