Infrastructure Bill May not Spark Stock Surge By TipRanks

The United States Senate has passed the highly anticipated $1-trillion infrastructure bill.

As part of this bill, President Joe Biden has signed an executive order that will help boost the EV manufacturing sector. As per the bill, the government will set aside $7.5 billion to set up a wide network of EV charging stations. 

This infrastructure bill has become a highly touted catalyst underpinning the rise of various EV infrastructure stocks. ChargePoint (CHPT) is the biggest within this peer group.

That said, investors are proving to be cautious right now. House speaker Nancy Pelosi has stated the House won’t vote on this bill until the Senate passes a separate $3.5-trillion spending bill focused on targeting other social measures. Accordingly, it may take months, if ever, to see this bill passed by the House.

Thus, it’s perhaps no surprise to see ChargePoint stock suffer a massive decline of more than 40% this year. (See CHPT stock charts on TipRanks)

Accordingly, investors may be wondering if this is the dip they should be buying, or if there’s more downside potential with this stock.

Here’s why the latter may be likely, at least in the short-term. I am bearish on this stock.

Insider Selling not Helping ChargePoint Stock

This EV charging stock has been dropping rather steadily in recent weeks. After rising to more than $35 in late June on anticipation of this infrastructure bill, investors seem keen to sell. Currently, investors can scoop up ChargePoint stock for just over $20 per share.

One of the major factors responsible for this fall was a secondary share offering by insiders. Insider selling can signify that insiders are content to take some money off the table. Generally speaking, this is not a bullish sign for those looking to put fresh capital into said stock.

Indeed, there’s likely a lot of growth on the horizon for EV charging stocks. However, investors may be concerned with a lack of visibility into when these companies will be cash flow positive. Showing a profit (even an adjusted profit) may prove to be just as tricky.

Accordingly, this is a stock for aggressive-growth investors only right now. It appears those looking at the fundamentals are having a hard time buying into the investment thesis for ChargePoint. Until this valuation becomes more tenable, that’s likely to remain the case.

ChargePoint Making Smart Moves, but Investors Seem to be Balking

The funding for EV charging infrastructure through the recently passed bill might be beneficial for CHPT. As of now, there are 41,400 charging stations across the U.S. However, only 5,000 of them are fast-charging stations. 

Apart from the federal funding, there have been other major developments that can positively impact ChargePoint. The EV charging company has recently acquired ViriCiti, a European electric fleet manager. In addition, it has forged many partnership deals. These deals will enable the…