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EVgo Stock Forecast: JP Morgan Analyst Predicts 80% Surge in 12 Months

Hannah Perry | October 4, 2024

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This EV Stock Could Jump 80% in 12 Months, JP Morgan Analyst Says

Evgo Inc (EVGO) has recently made headlines as its stock surges roughly 50% following an optimistic report from a JPMorgan analyst. Bill Peterson upgraded the electric vehicle (EV) charging company to ‘overweight’ on Thursday, suggesting a significant upside potential for shareholders.

JPMorgan’s Bullish Outlook

In his research note, Peterson projected that Evgo’s stock could reach $7 per share, reflecting an 80% upside from its previous closing price. He attributed this optimism to Evgo’s effective fast-charging owner-operator model, which has seen strong growth amidst a slowing EV market. Peterson stated, “Unlike hardware-software peers, Evgo’s fast charging owner-operator model has been scaling well with higher utilization and charge rates in the current muted EV environment.” At the time of writing, Evgo stock is trading at a year-to-date high of $6.0.

Recent Market Trends

In stark contrast to the first half of 2024, during which Evgo shares plummeted to below $2.0, the company’s stock has rallied sharply. This previous downturn was largely attributed to a slowdown in electric vehicle adoption, which adversely impacted many EV stocks. However, recovery was inevitable as the market discussed further investment opportunities for Evgo.

Financial Support from the Department of Education

What further fuels Peterson’s forecast is Evgo’s recent acquisition of a conditional commitment for over $1 billion in loan guarantees from the Department of Education. This financing will empower Evgo to accelerate the development of its public fast-charging network throughout the United States. As Peterson highlighted, Evgo stands to gain significantly from increased utilization rates across its charger network, especially if competing networks struggle to deploy their chargers due to decreased demand.

Performance Insights

Despite its impressive positioning in the market, it’s important to note that Evgo does not currently pay a dividend, which may be a point of concern for some investors. Additionally, the company is yet to turn a profit and is not expected to achieve profitability in the near future. Peterson anticipates that “core owner-operator players will outperform other charging peers” over the coming years, a stance that reflects a less optimistic outlook on alternative EV infrastructure companies.

Record Revenue Growth

One of the more compelling indicators of Evgo’s potential is its recent financial performance. The company reported record revenue of $66.6 million for the second quarter this August. Badar Khan, Evgo’s CEO, expressed confidence in their capacity to leverage the growing industry demand: “We’re seeing record demand in the industry, which we’re well situated to capture given our position as an owner-operator. We’re confident this momentum will result in strong returns for our shareholders.”

Conclusion: A Volatile Journey Ahead

While Evgo’s stock presents an intriguing investment opportunity with significant upside potential, investors are advised to exercise caution. With a volatile market and the company’s inability to yield profits as of now, the journey for shareholders may be bumpy. Still, the recent developments and optimistic analyses from key industry players suggest that Evgo could be a valuable addition to a well-diversified portfolio focused on the future of electric vehicle infrastructure.