Should You Buy ChargePoint While It’s Under $2?

Charging point (CHPT -4.20%) started with a number of positive points when it reported its fiscal second quarter 2025 results in September. The problem is, once you dig below the surface, there are some troubling negatives to consider. And those negatives may soon diminish.

If you’re buying ChargePoint below $2 per share, you’re making an aggressive bet that this upstart can overcome headwinds.

What does ChargePoint do?

The name ChargePoint is actually quite descriptive. It helps build the charging infrastructure needed to support the widespread adoption of electric vehicles (EVs). It touches on lots of different pieces of the puzzle, including industrial charging equipment, charging subscriptions and the charging technology people use at home. The company basically tries to cover the entire spectrum of electric vehicle charging needs.

Image source: Getty Images.

The company also has a very large presence. Its footprint not only spans North America, but also reaches across the pond into Europe, where it operates in 16 other markets. If you’re looking for a way to invest in EV infrastructure, ChargePoint is a pretty interesting way to do it.

And if you were to look only at the highlights from the company’s fiscal second quarter 2025 earnings release, you’d think things were going pretty well. Some highlights include a revenue update, a gross margin update, a comment on growth (21% year-over-year!) in subscription revenue, a note on cost reductions (down 29%!) and guidance for third quarter earnings.

When put into context, however, there are a lot of negatives here.

ChargePoint’s results weren’t all that great

For example, the company highlighted that revenue totaled $109 million, but omitted that this was down from $150 million a year ago. Clearly, business is not exactly booming. And while subscription revenue was up, which is good, the drop in network charging revenue more than offset that positive result in the quarter. Thus, the large overall decrease in income.

To be fair, the 24% gross margin was actually positive. In particular, an upward trend continues in this key measure of profitability. However, here too, you need to consider other factors.

For example, cost reduction has been a key focus for the company, as he also pointed out. Running a modest business isn’t bad, but ChargePoint is still in the early stages of growth. Having to focus on cost reduction at this point could end up hurting growth prospects.

Then there’s the fiscal 2025 third quarter revenue projection of $85 million to $95 million. This basically means management is telling investors to expect the top line to weaken further from the second quarter. No wonder management announced another round of cost-cutting when it announced earnings.

This results in a loss of $68.8 million. That was better than the previous year, when it lost $125 million. But it’s hard to get excited about another loss, even if that loss represents an improvement. ChargePoint isn’t profitable, and it looks like there will be a lot more red ink ahead, even as management works to cut costs.

Notably, only research and development was higher than its gross profit in the second quarter. That’s an expense it really can’t skimp on if it wants to keep up with the burgeoning electric vehicle industry.

Is ChargePoint worth buying under $2 per share?

For most investors, ChargePoint is probably not a bet worth taking. Yes, the company has achieved a lot. But it did so in a way that didn’t really benefit investors or create reliable gains.

The goal seems to be to build scale, but at some point ChargePoint needs to make money. Only the most aggressive investors should consider buying this stock below $2. That valuation could change if ChargePoint manages to start turning a profit, but until then, this stock looks more like a high-risk bet than an investment.