ChargePoint (CHPT) would need to see demand for electric vehicle charging systems recover to achieve sustainable cash generation and earnings before interest, taxes, depreciation, and amortization, RBC Capital Markets said in a note Wednesday.

The company's fiscal Q2 results came in better than expected, mainly driven by stronger networked charging systems revenue, margins that benefited from $4.2 million of tariff refunds, and higher residential charger sales, partly boosted by Amazon Prime Day, the brokerage said.

Despite some recent positive EV demand trends, the overall demand is still too small to drive a near-term positive inflection in adjusted earnings before interest, taxes, depreciation, and amortization, analysts said. They noted that the company does not expect that surge in residential charging sales to repeat in fiscal Q3.

ChargePoint is confident in the improvement of its revenue and margins due to a number of new product launches later in the year, according to the note.

RBC Capital Markets has a sector-perform, speculative risk rating and price target of $6.50 on ChargePoint.

Shares of the company climbed past 50% in Thursday trading.

Price: 7.81, Change: +2.62, Percent Change: +50.48