What Is the Market Sentiment on CHPT?

Tumbling to a price of $11.99 during today's morning trading session, shares of ChargePoint are now -49.13% below their average target price of $23.58. Does this mean the stock will reverse course? Analysts are giving CHPT an average rating of buy and target prices ranging from $12 to $46 dollars per share.

The market is more pessimistic on ChargePoint, because its short interest -- meaning the percentage of its shares that are being shorted on an expectation of a price decline -- is quite high at 15.4%. The float includes only shares that are available for public trading, and excludes preferred shares held by insiders.

When a stock is sold short, it means an investor has borrowed shares of the stock from their broker, and then sold them at the going market price. The investor hopes for the price to decline, so that they might buy those shares back at a lower price in the future. Once they do, they can return the borrowed shares to their broker, and keep the profit they made on the transaction.

Another way to gauge the sentiment on ChargePoint is to look at the percentage of institutions that are invested in the stock. In this case, 55.0% of the shares are held by pension, mutual, and hedge funds, which shows that these institutions probably have strong confidence in the stock.

Institutions have vast resources. If institutions are invested in a particular stock, it shows in most cases that they have performed quality research and concluded that it is a good investment. In some cases, however, increases in institutional ownership could be a sign of a takeover attempt or proxy fight, which can actually injure share prices. Also, institutions are not infallible, and can certainly make miscalculations -- often with spectacular results.

To sum up, ChargePoint is probably the subject of mixed market sentiment because of its an analyst consensus of strong upside potential, a buy rating, a large percentage of its shares sold short, and an average number of institutional investors. At Market Inference, we believe that any investment decision should be preceded by an in-depth analysis of the company's fundamental values and a comparison with similar stocks.

Here's a snapshot of some important facts to keep in mind about CHPT:

  • The stock has trailing 12 month price to earnings (Eps) of $-2.18 per share

  • ChargePoint has a trailing 12 month Price to Earnings (P/E) ratio of -5.5 compared to the S&P 500 average of 15.97

  • The company has a Price to Book (P/B) ratio of 6.8 in contrast to the S&P 500's average ratio of 2.95

  • ChargePoint is a Consumer Cyclical company, and the sector average P/E and P/B ratios are 24.11 and 3.11 respectively

For more in-depth valuation analysis on this stock and others, subscribe to our free newsletter today.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.

IN FOCUS