EVgo (EVGO) stock has gone parabolic this year, making it one of the best-performing companies in Wall Street. It surged to a high of $8.45 on Wednesday, its highest level since October 2022.
EVgo has jumped for four consecutive weeks and is up by over 355% from its lowest level in 2023. Most notably, it has outperformed other EV charging companies like Blink Charging and ChargePoint.
A large and growing company
EVgo’s shares have surged, as I have predicted several times, which you can see here, here, and here.
This rebound happened as the company demonstrated that its business was growing and doing better than other players in the charging industry.
The surge also happened after the company received financing commitment from the Department of Energy (DoE). In its statement, EVgo said that the $1.1 billion funding will go towards installing additional 7,500 fast-charging stalls in states like California, Georgia, and Illinois.
This funding is part of the Biden administration to ensure that the US has over 500k charging stations by 2030.
For starters, EVgo is one of the biggest EV charging companies in the United States. It does that by selling electricity directly to consumers who access its charging ports across the country.
It also works with Original Equipment Manufacturers (OEM) like General Motors, Nissan, and BMW. In this, it contracts with these companies to provide charging infrastructure for leased vehicles.
Revenue is growing
EVgo is benefiting from the ongoing growth in the electric and hybrid vehicle industry. While the industry is slowing, the reality is that more Americans are buying these vehicles.
Analysts expect that this number will continue rising in the longer term. The IEA estimates that EVs will represent about 60% of all vehicles sold in the United States. Other analysts estimate that the number of EVs in the country will be between 26.4 million and 33 million by 2030.
While many people will install chargers in their homes, demand for public charging stations will be high.
This trend explains why EVgo’s revenue is soaring. According to SeekingAlpha, its annual revenue rose from $17.5 million in 2019 to over $161 million in 2023 and $206 million in the trailing twelve months.
The most recent results revealed that EVgo’s revenue rose to over $66.6 million in the last quarter, a 32% increase from the same period last year. As such, its quarterly revenue was higher than the $54.6 million it made in 2022, showing how fast the company is growing.
Analysts are optimistic that EVgo’s business will continue doing well, with the average estimate for this year’s revenue being $257 million. The highest estimate for this year’s revenue is $261 million.
They also expect that its revenue for the next financial year will be $354 million, with some analysts predicting $400 million. If this trend continues, therefore, EVgo could get to over $1 billion in annual.
Most importantly, EVgo is expected to start narrowing its losses in the coming years. Its annual loss per share this year will be about 37 cents followed by 28 cents next year.
Its business model is relatively good since it has fewer workers than most gas stations. Once installed, a charging station can go on for a long time without needing any maintenance. The challenge, however, is when there are major weather events like hurricanes. In a recent note, a JPMorgan analyst said:
“Unlike hardware-software peers, EVgo’s fast charging owner-operator model has been scaling well with higher utilization and charge rates in the current muted EV environment.”
EVgo stock price analysis
The weekly chart shows that the EVgo share price has staged a strong comeback in the past few months.
It has rebounded and moved above the 23.6% Fibonacci Retracement point and the 50-week Exponential Moving Average.
Also, the MACD indicator has moved above the zero line, while the Relative Strength Index (RSI) has moved to the extremely overbought level.
Therefore, the stock price will likely continue rising as bulls target the next key resistance at $13.10, the 50% retracement point, which is about 60% above the current level.
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