To The Moon

$ChargePoint Holdings Inc.(CHPT)$

As 2025 began, my sell list comprised only five stocks — and ChargePoint was among them. The stark reality for investors who followed my guidance is that ChargePoint has declined roughly 44% year-to-date, continuing a downward spiral that has seen the stock lose over 90% of its value from peak levels. Having rated ChargePoint as a sell for several years, this article explores whether the time has come for investors to reconsider their stance on this beleaguered electric vehicle (EV) charging company, or whether caution remains warranted.

A Consistent Bearish Stance on the Electric Vehicle Sector

My skepticism toward the EV sector is well documented. Throughout the boom years of 2020 and 2021, when enthusiasm for EVs soared and valuations reached euphoric levels, I cautioned investors against indiscriminate buying. ChargePoint, a key player in the EV charging infrastructure space, was among the companies I flagged for its overstretched fundamentals and untenable valuations.

Notably, I was also an early and vocal critic of Tesla’s lofty valuation in early 2025 — a contrarian stance at a time when market sentiment was overwhelmingly optimistic. While many were excited about potential collaborations between Elon Musk and political figures like Donald Trump, I took the opposite approach. I rated Tesla as a sell, even going so far as to short the stock, capitalizing on the correction that followed. ChargePoint, similarly, was a stock I viewed with deep skepticism due to its financial profile and industry headwinds.

ChargePoint’s Steep Decline: A Stock in Free Fall

The severity of ChargePoint’s decline is undeniable. Since peaking at nearly $50 per share, the stock has plummeted to approximately $3, reflecting a staggering 94% loss over five years. This collapse underscores the pitfalls of investing in a sector driven more by speculative fervor than by sustainable business fundamentals.

My bearish stance on ChargePoint predates my YouTube presence, originating in written analyses for The Motley Fool. At the time, my thesis centered on the disconnect between EV industry hype and realistic market growth expectations. Valuations were wildly inflated, and the sector’s fundamentals failed to justify such optimism.

The broader market has since vindicated this caution. Most EV-related equities have tumbled over 90% from their highs. Even Tesla, the most prominent EV stock, remains roughly flat over five years — a lackluster performance given the substantial risks investors assumed during the hype phase.

Growth at All Costs: The Underlying Problem

Examining ChargePoint’s financial trajectory over the past seven years reveals the core challenges. From 2017 through 2023, the company prioritized rapid expansion, aggressively increasing its charging station network in anticipation of explosive EV adoption. This strategy, however, hinged on overly optimistic growth projections.

By 2023, the confluence of rising interest rates and the fading enthusiasm for EV stocks forced a strategic pivot. ChargePoint’s management publicly acknowledged that prior market size estimates had been drastically overstated, slashing growth forecasts by 50% to 75%. In response, the company shifted focus toward cost containment and restructuring, aiming to stabilize operations.

Though these measures have slowed the rate of financial losses, ChargePoint’s operating margins remain deeply negative at approximately -56%. The cessation of unchecked growth spending marks progress, yet the path to profitability remains arduous.

A Reality Check for the EV Industry

EV adoption today is largely confined to a niche segment: homeowners with access to private charging facilities who can conveniently recharge overnight. For the majority of consumers — especially those in urban environments without dedicated parking or charging infrastructure — EV ownership remains both costlier and less practical than traditional vehicles. This inherent limitation constrains the market potential for companies like ChargePoint.

Compounding these structural challenges, recent policy shifts have reduced governmental incentives for EV adoption. The federal $7,500 tax credit for EV purchases, a crucial driver of demand, is scheduled to expire in September 2025. The withdrawal of such subsidies is likely to further dampen growth prospects, intensifying pressures on the EV charging ecosystem.

From Bubble Valuations to Bargain Prices

At the peak of the EV mania in 2021, ChargePoint’s enterprise value-to-sales (EV/S) ratio soared to 60–70, a level unjustifiable for a company burning cash without clear path to profitability. This extreme overvaluation underpinned my longstanding sell recommendation.

Currently, with the stock trading near a one-times sales multiple, much of the market’s initial exuberance appears to have dissipated. Investor sentiment has shifted from unbridled optimism to guarded realism, with the harsh realities of the EV market now baked into the stock price.

While I maintain a skeptical view of the EV sector’s growth prospects and economics, ChargePoint’s valuation no longer appears egregiously inflated.

Revisiting the Rating: From Sell to Hold

After years of consistent bearishness, I am upgrading ChargePoint from a clear sell to a hold. The stock’s valuation has declined to a level that largely reflects the company’s challenges and the structural headwinds facing the EV industry.

Buy? Not at this stage. The fundamental outlook remains uncertain. ChargePoint continues to operate at significant losses, and demand for EV charging infrastructure faces real constraints, especially as government incentives fade.

Sell? Not necessarily. If you currently own ChargePoint shares, there is no urgent need to exit at today’s prices. The valuation no longer appears excessively inflated, and further downside may be limited.

Hold? Yes. The stock has likely bottomed in the near term, and investors who want exposure to the EV charging space but prefer to avoid speculative valuations may consider maintaining a position while monitoring developments closely.

Investors should approach ChargePoint with measured caution, balancing the risks of the evolving EV market with the potential for gradual stabilization.

Intrinsic Value and Entry Price Considerations

Determining ChargePoint’s intrinsic value is challenging given its ongoing losses and uncertain growth trajectory. Traditional valuation models relying on stable earnings or cash flows are difficult to apply when the company continues to operate at a substantial operating loss exceeding 50% of revenue.

That said, an intrinsic value estimate can be approached by projecting a path to profitability, factoring in:

• Gradual stabilization of operating margins through cost controls and right-sizing

• Moderate growth in EV adoption and charging infrastructure demand, tempered by fading government incentives

• A realistic timeline of 3 to 5 years to reach positive free cash flow

Using conservative assumptions, intrinsic value estimates for ChargePoint might range from $3 to $6 per share, depending heavily on execution and market conditions. This implies the current share price near $3 is close to or slightly below fair value, representing a potential entry point for long-term investors with a high tolerance for risk and uncertainty.

Entry Price Guidance:

• Investors seeking a margin of safety should target entry prices at or below current levels (~$3).

• More risk-averse investors might wait for evidence of sustained margin improvement or positive cash flow before initiating a position.

• Those with a higher risk appetite and conviction in EV infrastructure growth could consider phased buying at current valuations to average in exposure over time.

In summary, while ChargePoint’s current valuation appears to discount significant risks, investors should remain cautious and prioritize valuation discipline given the company’s unproven profitability outlook.

Final Thoughts and Takeaways for Investors

The saga of ChargePoint exemplifies the risks inherent in speculative bubbles and the importance of grounding investment decisions in fundamental analysis. My repeated warnings about the EV bubble spared many investors significant losses, and the near 90% decline in ChargePoint’s stock validates the caution.

While the stock’s valuation now discounts much of the negative outlook, the EV industry continues to face significant headwinds: limited addressable markets, infrastructure constraints, and policy uncertainty.

Investors should exercise prudence and maintain a critical perspective on the sector. A stock trading at a steep discount is not necessarily a bargain; sometimes it merely reflects diminished expectations.

Disclaimer: I want to make it clear that I am not a financial advisor, and nothing I say is intended to be a recommendation to buy or sell any financial instrument. Additionally, it's important to remember that there are no guarantees or certainties in trading or investing, and you should never invest money that you can't afford to lose.

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