ChargePoint (NYSE: CHPT), the leading builder of electric vehicle (EV) charging stations in North America and Europe, posted its latest earnings report on June 4. For the first quarter of fiscal 2026, which ended on April 30, the company's revenue fell 9% year over year to $97.6 million, missing analysts' expectations by $2.9 million. It narrowed its net loss from $71.8 million to $57.1 million, or $0.12 per share, which cleared the consensus forecast by a penny.

ChargePoint's stock rallied after that mixed earnings report, but it's still down about 60% over the past 12 months. Will it stabilize and recover over the following year?

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Why did ChargePoint's stock sink over the past few years?

ChargePoint ended its first quarter with more than 352,000 charging ports, including over 35,000 DC fast chargers, under its direct management. Its roaming partnerships also grant its customers access to more than 1.25 million charging ports across the world.

ChargePoint mainly sells connected charging stations to residential and commercial properties that want to host their own chargers and set their own prices. It provides those hosts with network access, billing, and customer support services. That sets it apart from Tesla's Superchargers, which mainly serve as extensions of the automaker and offer fewer connected and customizable features.

ChargePoint grew rapidly in fiscal 2022 and fiscal 2023 (which ended in January 2023), as EV sales surged in the post-pandemic market. But in fiscal 2024 and fiscal 2025, its growth stalled out as rising interest rates chilled the EV market and drove its residential and commercial customers to postpone their installations of new charging stalls.

But in fiscal 2025, its adjusted gross, operating, and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margins all improved as it narrowed its net loss. Its margins continued to expand in the first quarter of fiscal 2026, even as its revenue declined.

Data source: ChargePoint. YOY = Year-over-year. FY = fiscal year. EBITDA = earnings before interest, taxes, depreciation, and amortization.

ChargePoint attributes those margin improvements to the growth of its higher-margin subscription and software services -- which offset the lower margins of its chargers -- a big reduction in its inventories, and sweeping cost-cutting initiatives.

What does ChargePoint expect for the rest of fiscal 2026?

ChargePoint expects to generate $90 million to $100 million in revenue in the second quarter, which would represent a decline of 8% to 17% from a year ago. During the earnings call, CFO Mansi Khetani said the company was "guiding with caution due to the continued changes in the macro environment, including tariff uncertainty" and its focus on integrating its charging stalls with Eaton's electrical grid solutions through a new one-stop shop partnership.

ChargePoint didn't provide a full-year revenue outlook. However, it reiterated its goal of achieving a positive adjusted EBITDA in a single quarter of fiscal 2026.

Analysts expect its revenue to come in nearly flat for the full year, which implies its revenue growth will improve in the second half of the year as the macroenvironment warms up and the EV market stabilizes. They expect its annual adjusted EBITDA to improve to negative $63 million.

ChargePoint's growth may seem anemic right now, but it still has enough liquidity to ride out the near-term headwinds. It ended the first quarter with $196 million in cash and cash equivalents, it hasn't drawn a single dollar from its $150 million revolving credit facility, and it won't face any debt maturities until 2028.

Where will ChargePoint's stock be in a year?

For fiscal 2027, analysts expect ChargePoint's revenue to rise 29% to $537 million with a negative adjusted EBITDA of $16 million. For fiscal 2028, they expect its revenue to grow 33% to $713 million with a positive adjusted EBITDA of $67 million.

We should take those optimistic estimates with a grain of salt, but its cyclical downturn could represent a good buying opportunity for investors who can tune out the near-term noise. With an enterprise value of $465 million, it looks extremely undervalued at just over 1 times this year's sales. If ChargePoint meets analysts' expectations and trades at just 2 times its forward sales by the beginning of fiscal 2027, its stock price could easily rally more than 130% over the next 12 months.

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Shares of electric vehicle charging company ChargePoint Holdings (NYSE: CHPT) short-circuited Thursday morning, plunging 19.8% through 10:05 a.m. ET after the company reported twice as big a loss as anticipated for its fiscal 2026 first quarter.

Heading into the company's earnings report, analysts had been forecasting that ChargePoint would report losses of $0.06 per share on more than $100 million in sales in the period, which ended April 30. In fact, ChargePoint's losses were $0.12 per share, and sales fell by 8.8% year over year to $97.6 million.

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Image source: Getty Images.

ChargePoint's big Q1 loss

The news wasn't all bad. ChargePoint did improve its gross profit margin from 22% a year ago to 29%. Operating costs also declined, which improved operating margins.

On the bottom line, quarterly losses were the aforementioned $0.12 per share -- not great, but at least better than the $0.17 per share that ChargePoint lost a year ago. However, part of the improvement was due to ChargePoint issuing a lot of new shares, spreading its losses among 8.4% more shares outstanding. Its GAAP net loss was $57.1 million, down 20% from $71.8 million a year prior.

Is ChargePoint stock a sell?

Still and all, investors seem unhappy with the report, and at least part of the reason for that is management's guidance. ChargePoint predicts its fiscal Q2 2026 sales will land in the $90 million to $100 million range. About three-quarters of that range is less than it earned in fiscal Q1, suggesting the strong possibility that revenue will shrink sequentially. That contrasts poorly with the predictions of Wall Street analysts, whose consensus view was that ChargePoint's top line would grow respectably to more than $108 million in fiscal Q2.

It almost goes without saying that ChargePoint didn't guide investors to expect any profits in its fiscal Q2. The best the company was willing to offer on that point was that it "remains committed to its plans of achieving positive non-GAAP adjusted EBITDA during a quarter in fiscal year 2026." So, it's targeting sort of a profit in at least one quarter, but it wouldn't say which one.

That vague hope hardly seems a good reason to buy ChargePoint stock.

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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.