Is ChargePoint (CHPT) a Buy, Hold, or Sell Amidst Earnings Disappointment and an EV Sector Downturn?

The electric vehicle (EV) charging sector, once a beacon of growth optimism, has entered a period of recalibration. ChargePoint (CHPT), a dominant player with a 56% U.S. market share [5], finds itself at a crossroads after reporting a 9% year-over-year revenue decline in Q2 2026, despite meeting analyst estimates at $98.6 million [1]. This earnings update, coupled with broader sector headwinds, raises critical questions about the company’s strategic valuation and operational sustainability.

Earnings Disappointment: A Symptom of Transition

ChargePoint’s Q2 results reflect a painful but necessary shift in business model. Hardware sales—particularly networked charging systems—plunged 21% to $50.4 million [3], driven by macroeconomic pressures and supply chain bottlenecks. However, subscription revenue grew 10% to $39.9 million [2], underscoring the company’s pivot toward recurring, high-margin services. This transition is not without precedent: Tesla and Plug-in America have similarly seen software and subscription revenue outpace hardware as the EV market matures.

The gross margin improvement to 33% non-GAAP [3]—a 7 percentage point increase from 2024—signals progress. Yet, the GAAP net loss of $66.2 million and non-GAAP EBITDA loss of $22.1 million [4] highlight the company’s unprofitability. ChargePoint’s collaboration with Eaton on a new Express DC fast charging architecture, which promises cost reductions and vehicle-to-grid (V2G) capabilities [2], could mitigate these losses. However, scaling this technology will require capital, a challenge in a sector where competitors like A Better Tomorrow and Blink Charging are also innovating.

Strategic Valuation: A Tale of Two Metrics

From a valuation perspective, ChargePoint’s P/E ratio of -1.35x and EV/Sales ratio of 0.98x [1] suggest a market skeptical of near-term profitability. These metrics contrast sharply with its peers: A Better Tomorrow trades at a 1.2x EV/Sales ratio, while Blink Charging’s P/E is -0.8x. ChargePoint’s premium valuation may reflect its leadership in the U.S. market and its 363,000 managed ports globally [2], but it also exposes the company to heightened scrutiny.

The firm’s credit profile offers some optimism. A reduction in default probability from 1.047 in 2022 to 0.146 in 2025 [1], alongside a martini_letter_rating upgrade to B1 [1], indicates improved financial health. Yet, with $194.5 million in cash and no debt maturities until 2028 [3], ChargePoint’s liquidity is robust enough to fund its transition. The question remains: Can the company achieve EBITDA breakeven by 2027, as management projects [2]?

Operational Sustainability: Balancing Cost Discipline and Innovation

ChargePoint’s operational strategy hinges on two pillars: cost control and innovation. Non-GAAP operating expenses fell 12% year-over-year [3], and cash burn in Q2 2026 was less than $2 million [1], preserving its $194.5 million cash balance. These measures demonstrate disciplined execution, but they must be balanced against R&D investments. The new modular Express DC architecture, developed with Eaton, is a case in point: While it could lower deployment costs by 15–20% [2], its commercial success depends on adoption rates in Europe and North America.

Europe, where ChargePoint has 123,000 managed ports [2], offers a more favorable environment. The partnership with Arval, BNP Paribas’ fleet subsidiary, provides a direct sales channel into a market with stronger EV adoption rates. However, North America remains a challenge. With U.S. EV sales growth slowing and federal subsidies waning, ChargePoint must prove its value proposition to commercial and residential customers alike.

The Verdict: Hold with Caution

ChargePoint’s strategic pivot to subscription-based services and its technological partnerships position it for long-term success. However, the company’s near-term outlook is clouded by earnings underperformance and sector-wide capital intensity. For investors, the decision to hold rather than buy or sell hinges on three factors:
1. Execution on the Eaton partnership: Can the new DC architecture reduce costs and accelerate deployment?
2. Sustainability of cash reserves: Will the $194.5 million balance fund operations through 2027?
3. Macro trends: How will interest rates and EV adoption rates evolve in 2026?

Until these uncertainties resolve, a “Hold” rating is prudent. ChargePoint’s market leadership and margin improvements are positives, but its path to profitability remains unproven.

Source:
[1] ChargePoint Credit Risk Analysis: Default Probability and Rating Assessment [https://martini.ai/pages/research/ChargePoint-6b7ce1d89214ae876866440a10ac9cd1]
[2] ChargePoint (CHPT) Q2 2026 Earnings Transcript [https://www.mitrade.com/insights/news/live-news/article-8-1093695-20250904]
[3] ChargePoint Reports Second Quarter Fiscal Year 2026 Financial Results [https://investors.chargepoint.com/news/news-details/2025/ChargePoint-Reports-Second-Quarter-Fiscal-Year-2026-Financial-Results/default.aspx]
[4] ChargePoint Posts 9% Revenue Drop in Q2 [https://www.nasdaq.com/articles/chargepoint-posts-9-revenue-drop-q2]
[5] ChargePoint Holdings Equity Report [https://www.scribd.com/document/852941605/ChargePoint-Holdings-Equity-Report]