EVgo Faces Challenges Despite Revenue Growth and Future Plans

EVgo's stock struggles post-SPAC merge with its current price at $3, down from $15.05. Despite facing competition and rising rates, it anticipates revenue growth to $250M-$265M in 2024, improving EBITDA margins. Investors must weigh near-term dilution against long-term potential.

Date: 28-01-2025

AI Rating: 5

Revenue Growth
EVgo has shown significant revenue growth, increasing from $22 million in 2021 to approximately $161 million in 2023, almost meeting its projections. For the upcoming year, the company projects further revenue growth of 55%-65%, estimating revenues between $250 million and $265 million. Moreover, analysts forecast a continued upward trend with anticipated revenue growth of 41% in 2025 and 33% in 2026.

Adjusted EBITDA
While EVgo has faced challenges with its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), projections show improvement. The company expects the adjusted EBITDA margin to decrease its losses from negative $59 million to a range of negative $32-$28 million by the end of the next fiscal year.

Operating Metrics
EVgo's operational metrics indicate steady growth. They reported an increase in the number of stalls in operation from 2,740 in Q3 2023 to an expected 3,680 in Q3 2024, validating its expansion efforts. Its total customer base is also on track to rise from 785,000 to 1.2 million over the next year, showcasing increased demand for its charging services.

Market Positioning
Despite competition from major players like Tesla and ChargePoint, EVgo's strategic partnerships, particularly with General Motors, help bolster its market position. However, ongoing dilution and insider share sales pose risks to its stock price. Nonetheless, EVgo’s strong cash position and future growth estimates could provide a foundation for potential recovery.

In conclusion, while EVgo faces near-term challenges, its robust revenue growth and improving EBITDA could appeal to investors interested in the long-term prospects of the EV charging market.

Stocks: EVGO TSLA CHPT GM