ChargePoint vs. Wallbox: Which Electric Vehicle Charging Stock is a Better Buy?

The global electric vehicle (EV) charging station market is projected to rise at a CAGR of 30.26% over the next six years, enabling the industry to reach $111.9 billion by 2028, Fortune Business Insights reports. Consequently, the continuously rising amount of EVs on roads and beneficial government policies should enhance the industry’s growth in the long term.

Furthermore, President Biden’s infrastructure bill has earmarked over $7.5 billion to build over 500,000 EV charging stations in the U.S. Which is why in today’s article, I am going to analyze and compare two EV charging stocks: ChargePoint Holdings, Inc. (CHPT) and Wallbox N.V. (WBX), to determine which one presents a better buying opportunity. 

Founded in 2007, CHPT is a California-based company that offers EV charging networks and charging solutions in the U.S. WBX is a company based in Spain that provides advanced electric vehicle charging and energy management systems. 

Over the past month,‌ ‌CHPT stock has plunged about 40%, and WBX has dropped 23%. ‌ 

Recent News 

On December 8th, Oppenheimer analyst Colin Rusch maintained its bullish bias on ChargePoint after it had issued a questioning third-quarter earnings report. Colin Rusch pointed out ChargePoint's sustainable growth across main segments and high recurring revenue numbers. Oppenheimer kept its Outperform rating for ChargePoint with a price target of $40.

On December 6th, UBS analyst Chris Snyder started coverage of Wallbox N.V with a “Buy” rating. The firm believes that the company is poised to capitalize well in the home charging market. As a result, UBS established a 12-month price target of $25. This announcement added bullish momentum to WBX, pushing its shares higher. 

Recent Quarterly Performance & Analysts Estimates

On December 7th, ChargePoint reported earnings for the third fiscal quarter of 2022. The company reported total revenue of $65.03 million, representing an increase of 78.8% on a year-over-year basis. What is more, CHPT was able to beat analysts' revenue estimates by $1.77 million. The company mostly generates revenue through two segments - Networked Charging Systems and Subscriptions. 

Consequently, networked charging sales grew 111% YoY to $47.5 million, while subscription sales were reported 24% higher YoY at $13.4 million in FQ3. However, the company missed EPS consensus by $0.05, reporting GAAP EPS of ($0.21).

A ($0.16) consensus EPS estimate for the fiscal fourth quarter of 2022 represents a 90.90% improvement year-over-year. Besides, ChargePoint's revenue for the current quarter is expected to increase 79.69% year-over-year to $76.17 million.

In terms of Wallbox's financials, the company's revenues increased by around 250% year-over-year to $22 million in the third quarter of 2021, bringing in its total cumulative 2021 revenue to $55 million, up 16% from WBX's 2021 budget forecast. Management said that it had been the most successful quarter-to-date. This revenue growth was achieved because of the expansion of Wallbox’s commercial footprints in already established markets, the entrance into new markets, and the launch of new products.

Wallbox kept its strong position in the U.S. market, being one of the best-sellers of EV chargers on Amazon. As a result, its U.S. sales stood at $1.9 million in Q3, generating about $3.7 million during the nine-month. Besides, its gross margin was 39% in Q3 despite the global supply chain disruptions.  

Currently, Wall Street expects WBX's earnings to stand in the fourth quarter of 2021 at ($0.06) per share. Moreover, analysts expect Wallbox's current-quarter revenue to come in at $42.3 million.

Comparing Options Market Sentiment

Looking at the February 18th, 2022 option chain for both CHPT and WBX, we can determine options market sentiment by comparing the calls/puts ratio. In CHPT's case, the open calls/open puts ratio at the $14.00 strike price comes in at 0.18x, implying a bearish options market sentiment. When it comes to WBX, the open calls/open puts ratio at the $15.00 strike price stands at 9.26x, showing a strong bullish market sentiment.  

Conclusion

While both EV charging companies should capitalize on the industry's growth in the long term, I believe that WBX is a better pick at current levels. The company reported strong revenue growth in Q3, with highly diversified geographic revenue streams. And WBX has a medium-term bullish options market sentiment.

CHPT shares were trading at $11.53 per share on Monday morning, down $1.69 (-12.78%). Year-to-date, CHPT has declined -39.48%, versus a -10.03% rise in the benchmark S&P 500 index during the same period.

Oleksandr Pylypenko has more than 5 years of experience as an investment analyst and financial journalist. He has previously been a contributing writer for Seeking Alpha, Talks Market, and Market Realist.

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