EVgo stock price has bounced back this year, helped by its balance sheet improvement and its growing business. It has soared by about 300% from its lowest level in May, and was trading at $6.60. This rebound has brought its market cap to over $2 billion, making it the biggest EV stock in the United States.
EVGo has faced numerous tailwinds
The number of electric vehicles in the United States is rising, a trend that will continue in the coming years. Data by Statista shows that EV sales in the US are expected to hit about 2.3 million by 2030 from 1.4 million this year.
More data shows that there are now over 3.3 million EVs in the United States. While the growth has slowed, companies are still selling thousands of battery electric vehicles annually.
The implication of all this is that demand for public charging stations will continue rising in the next few years. This industry is now dominated by Tesla, which runs the biggest fleet of charging stations in the country.
Other companies that have a market share are EVgo, ChargePoint, Electrify America, and Volta Charging.
Unlike companies like Blink Charging and ChargePoint, EVgo’s business is doing well as the company plots a path towards profitability. This growth happened as the company grew its locations to 1,100 and the number of DC stores in operations to 3,680. It has added 1.2 million customer accounts, a number that will continue growing.
Read more: My EVgo stock price forecast was accurate: here’s what to expect
Earnings growth is continuing
EVgo’s business has seen strong growth in the past few years as its revenue rose from $17.5 million in 2019 to over $161 million.
This growth trajectory continued in the last quarter as its revenue rose by 92% to $67.5 million. Most of this revenue, or about $43.1 million, rose to over $43.1 million. It was the eighth quarter that the charging revenue had double-digit growth.
The company has made strong progress to accelerate this growtH. For example, it has a partnership with General Motors that will have them run about 400 flagship stores in the near term.
EVgo is also working to narrow its losses. The recent results showed that its adjusted EBITDA was about $5.4 million, helped by its efficiencies.
It has also worked with the US government to grow the charging infrastructure. It is part of companies that have received funding to accelerate public charging in the US.
Also, the company has received the conditional commitment of financing of loan guarantees worth about $1.05 billion. These funds will be used to build about 7,500 fast charging stations across the country.
Analysts are optimistic that EVgo’s business will continue doing well in the next few years. Its annual revenue for the year will be $259 million, a 61% increase from what it made last year. Analysts see the revenue figure rising to $360 million next year. EVgo has a long record of doing better than expected.
The average EVGO stock price forecast is $8, up from the current $6.58. Some of the most upbeat analysts are from JPMorgan and UBS.
EVgo stock price analysis
The daily chart shows that the EVGO share price has bounced back in the past few months. It bottomed at $1.64 and jumped to a high of $9 in October.
The stock has risen above the 50-day and 200-day moving averages, which formed a golden cross pattern on July 30. A golden cross is one of the most bullish patterns in the market.
EVgo shares have also moved to the first support of Andrew’s pitchfork tool. Therefore, the stock will likely continue rising, with the initial target being at $9, the highest point this year. A break above that level will point to more gains, potentially to $12.65, its highest level in August 2022, which is about 92% above the current level.
Read more: EVgo stock price analysis: risk/reward is very attractive
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