EVgo maintains electric car charging stations at public access points for private drivers and a growing corporate and fleet client base. It is the firm that operates the largest public fast-charging network for electric vehicles in the United States. The firm is known for having one of the most comprehensive networks of public access “fast chargers,” which are seen as vital for the widespread adoption of E.V.s over the next decade. The allure here is the high-growth opportunity in charging demand that EVgo is well-positioned to capitalize on. Here we will discuss What Is EVgo Stock? Everything You Need To Know.
While the stock market has been extraordinarily volatile, we feel the latest downturn provides a new purchasing opportunity. We are positive on EVGO, which benefits from multiple operational tailwinds and has the best growth momentum among its peer group over the next several years.
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Facts you Need to know about the Company before you Invest in EVgo stock
- It has more than 800 sites around the U.S.
- It also has more than 300,000 consumer accounts.
- Furthermore, it is the first to be powered entirely by renewable energy.
- EVgo chargers are already available in 68 metropolitan locations across 35 states.
- The firm was created in 2010 and went public earlier this year due to a SPAC merger.
- It also recently received several awards from the Pennsylvania Department of Environmental Protection.
- As part of the agency’s Driving PA Forward strategy, it will build 350 kW D.C. fast-charging stations.
- Cathy Zoi, the Company’s CEO, has held that position since 2007. Before this, she has been in a CEO and executive roles at other companies.
Is EVgo Overpriced?
Multiple firms have developed in this area of “E.V. charging operators” is intriguing. ChargePoint Holdings Inc (CHPT) now has a market size of $4.4 billion, while EVgo has a market cap of $2.1 billion. We may also include Allego N.V. (ALLG), Wallbox N.V. (WBX), Blink Charging Co (BLNK), Volta Inc (VLTA), and Beam Global in this category (BEEM).
The crucial point is that, while all these firms provide charging solutions, the distinctions are due to their business strategy or regional concentration. Allego, for example, is well-known in Europe. Wallbox Inc provides energy storage solutions for the home. We believe that the market potential is large enough for most of these companies to coexist.
The difficulty in doing a comparative value study is that the industry has not yet reached a degree of profitability, so we can only depend on projections. EVGO is trading at a forward sales multiple of 11x based on current management expectations for full-year 2022 revenue. This level is roughly equivalent to CHPT at 9x and ALLG at 10x.
Is it better to Buy, Sell, or Hold EVGO stock?
We recommend EVGO shares as a buy, with a $14.00 price objective, representing a 6x multiple on the current consensus 2023 revenue forecast. We believe that the second half of 2022 and the following year will be important for the Company to validate its growth patterns with a series of better-than-expected quarterly reports capable of adding positive momentum to the stock. In the long run, signs of improved margins can support substantially greater upside.
In terms of risks, keep in mind that the firm is presently not profitable, and there are major questions over its true growth trajectory, keeping it in the speculative category. Weaker-than-expected trends or a setback in important alliances or client transactions would necessitate a reconsideration of the profitability outlook.