Ambitious Revenue Guidance Puts Switchback Energy Stock in First Gear
When the special purpose acquisition company (SPAC) deal to merge with electric-vehicle (EV) infrastructure company ChargePoint was announced back in September, Switchback Energy’s (NYSE:SBE) profile was raised among investors. And as a result, the SBE stock price started to perk up.
For prospective investors in the EV charging niche, this $2.4 billion deal could be a game changer. Assuming nothing goes awry, the closing of the SPAC deal will take place on Jan. 27.
I can’t blame people for getting excited about SBE stock as the finalization date approaches. ChargePoint presents an excellent “picks and shovels” type of investment in the EV sector, because you don’t have to bet on a particular electric-car manufacturer.
Yet, as the SBE stock price charges higher, the skeptics might question whether investors are moving too fast. Are they merely speculating on the hope of a rising renewable energy tide, or is ChargePoint a business that’s built to last?
SBE Stock at a Glance
It’s fascinating to consider that SBE stock was magnetized to the $10 level less than a year ago. However, that’s not an unusual price for pre-deal SPAC stocks.
Practically every stock with an EV connection made a huge move in 2020. SBE stock was no exception to that rule as it shot up to $37 in late November.
A series of higher lows and higher highs followed throughout the remainder of the year. That’s a pattern that market technicians like to see, as it signals increasing waves of buying activity.
The SBE share price moved up 6% on Jan. 8, settling at $42.38. That might sound like a big move, but it’s actually fairly typical for SBE stock. The point is, you’ll need to strap in and wear your seat belt, as this stock is a serious mover.
Now, don’t misunderstand — there’s nothing wrong with taking a position in specific electric-car makers. I’ve highlighted some of them myself, and those stocks have often performed quite well.
Investing in SBE stock can actually be a solid addition to your EV stock holdings. After all, if you believe in the future of electric vehicles, shouldn’t you also have an optimistic outlook on the devices that charge them up?
And when it comes to the charger market, you’d be hard-pressed to find a more sensible pick than ChargePoint. In this vein, Switchback Energy CEO, CFO and Director Scott McNeill proposes a compelling first-is-best argument:
“As a first mover in the space, ChargePoint has distinguished itself as the number one EV charging network and is well positioned to deliver mission-critical charging infrastructure as the expected transition to electric mobility accelerates.”
A Market on the Move
And with ChargePoint having been around since 2007 — long before the electric-vehicle SPAC frenzy started — it’s fair to say that the company is among the most established in its niche.
Besides, it’s a great niche to be involved in. You might have read about the growth potential of the EV, but what about chargers? Again, I’ll let McNeill make the case:
“The EV charging industry is accelerating and it is expected that charging infrastructure investment will be $190 billion by 2030.”
ChargePoint will undoubtedly take a big piece of that $190 billion pie as the company operates the world’s largest network of independently owned EV charging stations.
Impressively, ChargePoint has a presence in the U.S. as well as 13 other countries. Furthermore, the company is projecting annual revenues of $2 billion by 2026. Clearly, both the EV battery market and the company itself are poised for dramatic moves in the coming years.
With ChargePoint guiding for multibillion-dollar revenues, the bull case is evident for SBE stock.
And as the closing date for the SPAC deal approaches, investors can ride the wave of higher highs with a position in SBE shares.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation.