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1 EV Stock Under $10 With 25% Upside Potential
Electric vehicle (EV) stocks have been in focus since the election of Donald Trump, particularly following reports that the president-elect may consider ending EV tax credits - a move that's widely expected to have a chilling effect on already-sluggish domestic EV adoption.
One company that could feel the impact of any potential policy changes is EVgo, Inc. (EVGO), a Los Angeles-based owner and operator of charging stations for electric vehicles across the United States. They offer electrical charging facilities directly to customers via publicly accessible charging stations. EVGO's fast charging solution provides its customers with up to 90 miles in 30 minutes of charge. The company has partnered with regional chain stores, automotive original equipment manufacturers (OEMs), shopping centers, gas stations, hotels, and more to help deploy its EV charging facilities.
EVGO stock has been remarkably volatile lately. The shares are up 69.8% on a YTD basis, but they've tumbled nearly 25% over the past month. However, EVGO has already bounced back from its recent lows, up 20% over the past week.
EVgo Delivers Solid Results
EVgo posted its third-quarter results on Nov. 12, where it posted a loss of $0.11 per share - in line with the market's expectations, though it was wider than last year’s loss of $0.09 per share. EVgo reported an EBITDA loss of $8.9 million, better than Wall Street’s $11 million estimates. Revenue for the quarter totaled $67.54 million, easily beating estimates of $65.97 million, while nearly doubling from $32.10 million in the year-ago period.
During the quarter, the company’s total network output (used to measure utilization) was up by 111% to reach 78GWh as it added 147,000 new customers, ending the quarter with a total customer base of 1.2 million.
“I’m pleased to report another record quarter anchored by strong revenues and triple digit year-over-year network throughput growth. Our deployment team continued to meet demand head-on bringing a record number of stalls online in the third quarter. With our conditional commitment from DOE for a loan guarantee of up to $1.05 billion announced last month, EVgo is poised to lead the industry as the charging provider of choice,” said CEO Badar Khan.
Management also upped their full-year guidance, as they now expect revenue in the range of $250 million to $265 million, and an adjusted EBITDA loss of $38.0 million to $32.0 million.
Analysts Say EVGO is a ‘Strong Buy’
Market experts are highly bullish on the stock, with a consensus “Strong Buy” rating from the 12 analysts in coverage - up from “Moderate Buy” two months ago. EVGO has 10 “Strong Buys,” compared to just 1 “Moderate Buy” and 1 “Hold” rating.
After earnings, UBS analyst William Grippin maintained a “Buy” rating on the EV charging stock, noting that EVGO is somewhat more insulated from EV demand cycles relative to pure charging hardware providers. Grippin has an $8.50 price target on EVGO.
Like UBS, Roth MKM analyst Craig Irwin thinks the pending DOE loan deal will be a positive driver for EVGO in the short term - and that same catalyst was the impetus for a new bull note from JPMorgan earlier this week, with the firm setting an $8 price target.
The average price target for EVGO now stands at $7.82, indicating expected upside potential of about 25% from current levels.
On the date of publication, Ruchi Gupta did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
