Jul 15, 2022
[4 min Read]
You are probably aware that ChargePoint Holdings, Inc. (NYSE: CHPT) is a leader in the Specialty Retail space. In this analysis, we are going to look at some of the key financial ratios for ChargePoint to determine a price prediction for CHPT. Remember these price predictions take into account several assumptions (which I will highlight) to determine a future price. I'll share my CHPT stock price prediction, then show you the approach and assumptions used to calculate the CHPT stock forecast.
Before we go any further, let me start by saying this, stock forecasting is hard. I don't know what the future will hold, and neither do Wall Street Analysts. If they could accurately predict the future, they would be able to beat the S&P 500 and I would be extremely wealthy. What I can say is that we can use available data to determine a reasonable CHPT stock forecast and helps us make better investment decisions, so hopefully, you find this analysis useful.
The ChargePoint Holdings, Inc. stock price prediction of $18.96 was derived from 2 main valuation methods (which are averaged for the final price target you see above). I'll dive into the approach to show you how I determined how I “predicted” a stock price of $18.96 for CHPT.
The Financial growth Metrics provide an analytics valuation approach to determining a reasonable CHPT stock forecast. The comparable companies analysis determines CHPT stock forecast by comparing CHPT's financial ratios to the average financial ratios of a group of similar stocks.
For this part of the analysis, I am looking at the history of key financial metrics for ChargePoint Holdings, Inc. to forecast the stock into 2022 and 2025. Most investors know that historical performance does not guarantee future performance, but it is useful to see how CHPT has been trending.
CHPT's Forward Earnings Per Share estimate is -0.56, and CHPT's Forward Price to Earnings Ratio has been estimated to be -47.25. Due to the fact that we have both CHPT's forward EPS and forward P/E, we can multiply them together to get a CHPT stock forecast of $26.46 per share
There are other ways to predict the price for CHPT but I would argue that P/E, EPS, and Earnings Growth are the most commonly used financial metrics by analysts and investors. This is why I used them to forecast CHPT's stock price.
In order to undergo a comparable analysis, we need to outline CHPT's main competitors. These competitors need to have; a stock, valid financial ratios, operations similar to CHPT, and a market cap similar to CHPT (if possible).
By keeping this in mind, I found the following list of companies to be some of CHPT stocks closest competitors:
Overall, CHPT stock is overvalued and needs to experience a change in their stock price of (an average of) 2.20% to be considered “at fair value”. Applying this percentage change to CHPT's current price of $11.23 implies a forecasted price of $11.46
Analyst Ratings have provided a relatively strong indicator of future price movement, which is why they are used to (hopefully) support our CHPT stock forecast. There are a total of 22 analyst ratings for CHPT, which are distributed as follows:
Overall, the majority of analysts have given the CHPT stock a "buy" rating, indicating that they think it is undervalued and therefore are bullish on their stock. This is great news as we have come to (more or less) the same conclusion as the analysts. Additionally, all of the other analysts who didn't give CHPT a "buy" rating, all gave it a "hold" instead. This signifies that they think CHPT is at/near it's fair value and thus they are neutral on the CHPT stock.
Should you buy CHPT? Well, based on the overall CHPT stock forecast of $18.96 per share, and the current price of CHPT, I would agree with the analysts and say CHPT is a buy. Let me know what you think, happy to dive into other aspects of CHPT to help you make an informed investment decision.