Here's Why ChargePoint Stock Is a Buy Before the End of May

ChargePoint (NYSE: CHPT) has long been a poster child for the EV charging infrastructure boom—and its bust. Since its 2021 SPAC merger, the stock has cratered from a $32 debut to under $1, reflecting broader industry turbulence and execution challenges. But beneath the volatility lies a company making critical strides toward profitability and market dominance. With a $434 million enterprise value trading at less than 1x forward sales, ChargePoint’s stock could be primed for a rebound—if investors look past the noise.

The Turnaround Starts with Subscription Growth

ChargePoint’s Q1 2025 results underscore a critical shift: its subscription revenue grew 27% year-over-year to $33.4 million, now representing over 30% of total revenue. This recurring revenue stream, driven by cloud-based software and charging management services, is the company’s anchor in choppy waters. Unlike volatile hardware sales, subscriptions provide steady cash flow—a key differentiator from rivals like EVgo or Blink Charging, which rely more on capital-intensive projects.

Meanwhile, ChargePoint’s non-GAAP adjusted EBITDA loss narrowed 25% year-over-year to $36.5 million, with a clear path to profitability by late 2025. Management reaffirmed its goal of achieving positive EBITDA by Q4 2025, fueled by margin improvements. Sequentially, non-GAAP gross margins are expected to rebound to 30% by Q4 2025—a stark contrast to the 24% reported in Q1.

Strategic Wins in High-Growth Markets

ChargePoint’s recent moves signal a focus on high-margin, scalable opportunities:
1. Government Contracts: FedRAMP certification unlocked its first multimillion-dollar federal order, opening doors to U.S. public-sector markets. With $71 million in NEVI grants already secured via customer projects, ChargePoint is positioned to capitalize on the $5 billion in federal EV infrastructure funding flowing through 2026.
2. DC Fast Charging Dominance: Over 33,000 Level 3 DC fast chargers in its network give it a leg up in the race to build out critical highway corridors. Partnerships with General Motors further cement its role as a go-to provider for automakers expanding EV fleets.
3. Global Network Expansion: Access to 1 million charging locations worldwide—including roaming agreements with networks like Electrify America—creates a defensible ecosystem. Users on its platform now spend 14% more time charging than a year ago, signaling deeper engagement.

The Undervalued Catalyst: Liquidity and Leverage

Despite the stock’s collapse, ChargePoint enters 2025 with $292 million in cash and no debt maturities until 2028. This liquidity buffer allows it to weather near-term headwinds, such as the 34% YoY decline in hardware revenue, while focusing on margin expansion. Compare this to Tesla (TSLA), which has faced its own EV infrastructure challenges, but trades at over 3x sales—a stark contrast to ChargePoint’s deeply discounted valuation.

The Risk of Shorts and the Reward of a Squeeze

With 24% of shares sold short as of March 2024, ChargePoint’s stock is a prime candidate for a short squeeze. A positive EBITDA surprise in late 2025 or a major government contract win could trigger a rapid rerating. Meanwhile, insider buying—CEO Paschal Secretti purchased $1 million in stock in early 2024—adds confidence in management’s vision.

Conclusion: A Bottom in the Making?

ChargePoint’s valuation is a puzzle. At under $1 per share, it’s priced for continued failure—a narrative that ignores its subscription-led growth, margin trajectory, and strategic wins in federal markets. If it hits its 2025 EBITDA target, the stock could see a valuation rebound to 3-4x sales, implying a potential 200-300% upside.

Critics will point to risks: hardware revenue volatility, competition from EVgo and Tesla, and regulatory delays. But the data tells a different story. With $36 million in annualized EBITDA improvement already underway and a path to positive cash flow, ChargePoint’s stock is a contrarian bet on the EV charging infrastructure’s long-term promise. For investors with a 2-3 year horizon, this could be the setup for a multi-bagger—if patience wins over panic.

Final Call: ChargePoint’s fundamentals are improving faster than its stock price. Before May’s close, consider taking a position in this undervalued EV infrastructure leader.