Well-Positioned to Benefit From Growing EV Adoption, Says Analyst

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EVgo (EVGO) shares have significantly outpaced the market so far in 2022, showing year-to-date gains of 20% vs. the S&P 500’s 6% downturn.

Following the DCFC (DC fast charging) leader’s latest quarterly report, Evercore’s James West thinks the stock still has plenty of room to run.

That said, 4Q21’s earnings were not an all-out success, with decent growth offset by bigger losses than anticipated. Specifically, the company generated revenue of $7.1 million, showing a 70% year-over-year uptick vs. the $4.2 million reported in 4Q20 and beating the Street’s $6.1 million estimate. However, while the Street had anticipated that the company would post a $0.09 loss per share, EVgo delivered a loss of $0.67.

The sales outlook also came in just shy of expectations. The company is projecting 2022 sales of $52 million. Wall Street’s forecast stood at $53.2 million.

Nevertheless, West highlights the continued growth of the E&C (engineering and construction) pipeline. The active pipeline saw out the year with roughly 3,100 stalls vs. the 2,500 it boasted by the end of Q3. Over the long-term, the company has “line of sight” on 4,000 extra sites. 2021 also ended with 1,676 operational charging stalls (1,903 with those under construction included). The company guided for 3000-3,300 stalls in operation or under construction by the end of the year.

In an effort to further boost growth, EVGO has also introduced eXtend, a white label solution service aimed at the rising corridor charging market.

Overall, West thinks EVgo is set to benefit from both the government and consumers’ pivot to the “secular trend of the electrification of transportation.”

“We continue to believe that EV growth is part ‘push’ (regulation) and part ‘pull’ (consumer adoption),” West said. “Government and auto OEMs support the electrification and decarbonization of mobility. EVGO is a pure play on DCFC charging and charging as a service with proprietary algorithms that analyze census and other data sources to pinpoint premium and convenient charging station locations, which meet high return hurdle rates.”

To this end, West rates EVGO an Outperform (i.e. Buy) along with a $22 price target, suggesting one-year returns of ~68%. (To watch West’s track record, click here)

Other analysts, though, aren’t quite as bullish. Based on an additional 1 Buy, 3 Holds and 1 Sell, the stock has a Hold consensus rating. The bulls, though, have a slight edge, as the average price target comes in at $14.20 and implies potential upside of ~8%. (See EVgo stock analysis on TipRanks)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.



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