Is ChargePoint's Recent Reverse Split a Buying Opportunity or a Warning Sign?

ChargePoint Holdings (CHPT) executed a 1-for-20 reverse stock split on July 28, 2025, a move that initially appeared to stabilize its share price and avert NYSE delisting. The split, approved by shareholders in July 2025, reduced the number of outstanding shares from 467 million to 23.4 million, artificially inflating the stock price from $0.35 to $7.00 per share. While this technical compliance measure succeeded in meeting exchange requirements, it raises a critical question for investors: Does the reverse split mask deeper financial distress, or is it a strategic pivot in a high-growth sector?

The Reverse Split: A Short-Term Fix, Not a Cure

ChargePoint's reverse stock split was a necessary but hollow victory. The company's stock had fallen 72% year-to-date, trading below the NYSE's $1 minimum price threshold. By consolidating shares, the firm avoided immediate delisting but did not address underlying issues. Revenue declined 15.7% year-over-year in 2025, and Q1 2026 results showed a further 9% drop to $98 million. Operating expenses remain stubbornly high at $350 million annually, with R&D and sales costs outpacing gross profit. Cash reserves have dwindled from $325 million in 2024 to $225 million in 2025, raising red flags about liquidity.

The split's limited impact is evident in the company's financial metrics. While the share price rose post-split, the market capitalization remained unchanged, and the company's price-to-sales (P/S) ratio—already near zero—did not improve. reveals ChargePoint's persistent undervaluation.

A Sector on the Rise, But Not All Players Are Equal

The EV charging industry is poised for explosive growth. Market research projects the U.S. EV charging infrastructure market to expand from $6.41 billion in 2025 to $24.07 billion by 2030, driven by government incentives, fast-charging demand, and electrification trends. ChargePoint's 70% market share in North American networked Level 2 charging positions it as a key player. However, the company's dominance in legacy infrastructure contrasts with its weak position in fast-charging—a segment dominated by Tesla's Supercharger network and ABB's DC fast chargers.

highlights a stark reality: ChargePoint's revenue is heavily skewed toward product sales (e.g., Level 2 chargers for residential and commercial use), which offer low margins and limited recurring revenue. In contrast, Tesla and ABB are capitalizing on fast-charging subscriptions and hardware-software integration, creating more sustainable cash flows.

Liquidity Risks and Strategic Missteps

ChargePoint's liquidity challenges are compounded by its business model. Unlike SaaS companies that generate recurring revenue, ChargePoint relies on one-time hardware sales, with gross margins hovering near 10%. This structure makes the company vulnerable to margin compression as competition intensifies and commoditization takes hold.

The company's recent 15% workforce reduction and $41 million in annualized cost savings are positive steps, but they may not offset its $22.8 million non-GAAP EBITDA loss in Q1 2026. Analysts remain skeptical: UBS maintains a Neutral rating, while Goldman Sachs has downgraded to Sell, citing a lack of a clear turnaround strategy. ChargePoint's current ratio of 1.82 suggests short-term liquidity is manageable, but its ability to secure additional funding in a tightening credit environment is uncertain.

The Long Game: Can ChargePoint Adapt?

To thrive in the long term, ChargePoint must pivot from a product-centric model to one that emphasizes recurring revenue. The company has taken incremental steps—launching an AI-powered driver support tool, partnering with Eaton for commercial solutions, and exploring subscription-based charging services—but these initiatives are nascent. Its partnership with LG Electronics to develop universal connectors (e.g., the Omni Port) could help, but execution risks remain.

reveals another challenge: ChargePoint's focus on North America contrasts with the rapid growth in Europe and Southeast Asia, where competitors like bp pulse and A Better Place are expanding.

Investment Implications

For investors, the reverse split is a warning sign, not a buying opportunity. ChargePoint's deteriorating fundamentals—declining revenue, high cash burn, and structural margin issues—outweigh its long-term industry tailwinds. While the EV charging sector is undeniably growing, ChargePoint's lack of differentiation in fast-charging, reliance on one-time sales, and liquidity constraints make it a high-risk bet.

Recommendation: Investors should avoid CHPT at current valuations. The reverse split may attract short-term speculation, but the company's path to profitability is unclear. For those bullish on the EV charging sector, consider allocating capital to firms with stronger balance sheets and recurring revenue models, such as Tesla (TSLA) or ABB (ABB). ChargePoint's survival hinges on a successful pivot to recurring revenue and cost discipline—outcomes that remain uncertain.

underscores the stark divergence in execution between industry leaders and underperformers. In the EV charging race, only the adaptable will survive.