Partnerships Galore Further Boost the Bull Case

You can’t beat first mover advantage. Looking at the case of ChargePoint (CHPT), Evercore analyst James West believes the company’s “scale, land and expand strategy, consistent focus on R&D and new software and hardware advancements” present it with an advantage over newer incumbents to the EV charging space.

Those advantages already seem to be bearing fruit, considering the slew of recent announcements from the EV charging station leader.

First off, to accelerate the roll out of EV charging, the company has partnered with Goldman Sachs Renewable Power (GSRP). As part of its ChargePoint as a Service (CPaaS) product, this allows the company to offer “tailored financing solutions.” These are set to include both financing and turnkey charging. “CPaaS enables customers to pay for charging infrastructure as an operational expense and the turnkey allows customers to host a station at zero cost to them,” West explained.

West sees a number of use cases which will allow for speedier development of EV charging infrastructure and enable commercial or fleet clients to swiftly “scale” their charging stations to meet the requirements of their business. “For example,” says the analyst, “retailers taking advantage of the zero capital expense to add charging infrastructure while leveraging the turnkey option to have CHPT handle the construction, installation and maintenance of the stations.”

Then there is the Volvo and Starbucks collaboration that involves a pilot program which will see up to 60 Volvo branded ChargePoint DCFCs installed at as many as 15 Starbucks locations.

The interesting thing to note here is that West believes it signifies a potential change in people’s vehicle fueling habits. The analyst expects fueling behavior will evolve from simply fueling up for a trip to instead “charging where people spend time.” Installation should kick off this summer and is expected to be complete by the end of the year. All EV owners who have a ChargePoint account will have access to the Volvo branded chargers.

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Lastly, there is also a new partnership with Gatik, which targets the decarbonization of the B2B short-haul logistics industry. Customers carrying wares in Gatik’s autonomous electric fleet will be able to access CHPT’s know how in “site design and interoperability validation,” while ChargePoint’s nationwide charging network and fleet specific software will also be available to Gatik.

With all the above as backdrop, West reiterates an Outperform (i.e., Buy) rating on CHPT shares, along with a $28 price target. The implication for investors? Potential upside of ~44%. (To watch West’s track record, click here)

Looking at the consensus breakdown, based on an 8 to 4 split between Buys and Holds, CHPT claims a Moderate Buy consensus rating. The average target clocks in at $24.50, implying shares have room for ~26% growth in the year ahead. (See CHPT stock forecast 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.