EVgo Sees Dramatic Turnaround in Stock Performance as the Company Expands Its Fast-Charging Network and Receives Support from the U.S. Government

Electric vehicle charging company EVgo has seen a dramatic turnaround in its stock performance, with shares gaining over 240% in the past six months.

Electric vehicle charging company EVgo has seen a dramatic rally in its stock performance, gaining over 240% in the past six months.

On Thursday, EVgo announced that it had received a conditional $1.05 billion loan commitment from the Department of Energy’s (DOE) Loan Programs Office.

The loan, provided through the Title 17 program, aims to accelerate the growth of EVgo’s fast-charging network across the United States.

If finalized, the funding is expected to support the installation of up to 7,500 DC fast chargers by 2alimentos2030.

The expansion project will focus on key state markets, including Arizona, California, Florida, Georgia, Illinois, Michigan, New Jersey, New York, Pennsylvania, and Texas.

EVgo estimates that the buildout will create more than 1,000 jobs, with over 700 of these being contracted resources employed by the company.

This development caught the attention of Wall Street analysts. Just prior to the announcement, J.P. Morgan analyst Bill Peterson upgraded EVgo’s rating from Neutral to Overweight (Buy) and placed the stock on a Positive Catalyst Watch.

Peterson cited growing confidence that a loan was forthcoming as the reason for the upgrade. While Peterson expects some pullback in the stock price following the massive surge, he maintains a positive outlook on EVgo’s future.

The analyst anticipates the company reaching EBITDA breakeven next year and scaling to over $200 million with 7,000 operational stalls. This growth is expected to be driven by higher network throughput and better fixed cost absorption.

EVgo has already established itself as a significant player in the electric vehicle charging landscape. The company operates thousands of charging stations across the United States, focusing on fast-charging solutions for EV drivers on the go.

EVgo has formed partnerships with major automotive industry players, including ride-sharing services like Uber and Lyft, as well as car manufacturers such as Nissan, BMW, Chevrolet, Tesla, Kia, Ford, and Hyundai.

Earlier in 2023, EVgo, in collaboration with General Motors, announced the installation of its thousandth fast-charging stall. The company has also revealed plans to add an additional 400 fast-charging stalls in prominent U.S. cities, featuring high-speed 350kW chargers and user-focused amenities.

The expansion of EVgo’s network comes at a critical time in the automotive industry’s transformation towards more environmentally friendly options.

Research from MIT and the U.S. Department of Energy has shown that EVs emit 25% less carbon dioxide per mile compared to hybrid or gas-powered vehicles when relying on the current energy mix of the U.S. grid.

Regarding the DOE loan, J.P. Morgan’s Peterson believes it is likely to close within 3 to 6 months, based on DOE precedents and EVgo’s established business model.

The analyst views the announcement positively, stating that it signals EVgo’s market-readiness, reduces significant funding risk associated with a capex-heavy infrastructure model, and could position EVgo well against competitors with larger balance sheets.

While EVgo does not anticipate raising any equity as a requirement for the loan closing, Peterson suggests the company might opportunistically pursue this option.

EVgo’s stock price gained 72.25% in just five trading sessions, with a particularly dramatic 61% surge on the day of the loan announcement. The company’s market cap has increased by almost $1 billion in the past month of trading.

The above is the detailed content of EVgo Sees Dramatic Turnaround in Stock Performance as the Company Expands Its Fast-Charging Network and Receives Support from the U.S. Government. For more information, please follow other related articles on the PHP Chinese website!