Shares of EV charging company ChargePoint have been caught in the sell off that’s hammered small-capitalization stocks that don’t produce earnings or generate free cash flow, yet. Investors hoped that third-quarter earnings could turn sentiment around, but some concerns linger.
ChargePoint (ticker: CHPT), on Thursday afternoon, reported a per-share loss of 25 cents from $125 million in sales. Wall Street was looking for a loss of 20 cents per share on sales of $132.3 million.
It’s an earnings miss, but sales matter more. ChargePoint is still in growth mode. Third-quarter sales in 2021 amounted to about $65 million. More EVs are being sold in the U.S., and American charging infrastructure is trying to keep up.
Company guidance called for third-quarter sales in 2022 of about $125 million to $135 million, so things came in at the low end of the company’s expected range.
Prior full year sales guidance was $450 million to $500 million. New guidance is $475 million to $480 million. The midpoint of guidance is a little higher and implies $160 million to $170 million in fourth-quarter sales. Wall Street currently projects Q4 sales of $161 million.
Sales and sales guidance look close to what the Street and investors expected. Shares are holding their own in after hours trading down 2%.
Wall Street also expects the company to use about $200 million in cash over the coming 12 months. The company ended the third quarter with about $400 million in cash on its balance sheet.
Coming into earnings, ChargePoint stock is down about 21% over the past three months. Shares have lost about 36% so far in 2022.
Small stocks that don’t generate earnings are struggling as U.S. interest rates rise. The Next Gen SPAC Derived ETF, which held hundreds of stocks in small start-up companies, was down more than 30% year to date before it liquidated at the end of August.
Options markets imply that shares will move about 11%, up or down, following earnings. The stock has moved an average of about 6%, up or down, after the past four quarterly reports. Shares have risen twice and fallen twice over that span.
ChargePoint stock closed down 1.9% in Thursday trading at $12.19 a share. TheS&P 500 and Dow Jones Industrial Average dropped 0.1% and 0.6%, respectively.
