EVGO

EVgo has shown significant improvement in its financial metrics through 2025, though profitability remains a challenge. The company's latest quarterly report showed revenue growth of 85% year-over-year, driven by increased EV adoption and expansion of its charging network. While still operating at a loss, EVgo has managed to reduce its net margin to -45%, a substantial improvement from historical levels. The balance sheet remains relatively stable with $280M in cash and equivalents, providing adequate runway for continued expansion.

The company has strengthened its market position through strategic partnerships with major automakers and retail locations, expanding its network to over 4,500 fast-charging stalls nationwide. Recent government initiatives, including the Infrastructure Investment and Jobs Act funding, continue to provide tailwinds for EVgo's growth. However, increasing competition from ChargePoint, Electrify America, and Tesla's newly opened Supercharger network presents challenges to market share and pricing power. The company's focus on premium locations and high-power charging capabilities helps differentiate its offering, though margin pressure remains a concern.

At current valuation levels, EVgo trades at 6.8x forward revenue, which appears reasonable given the company's growth rate and market opportunity. The stock has been volatile, reflecting broader market uncertainty around EV adoption rates and interest rate impacts. Key catalysts include accelerating EV sales, particularly in the mass-market segment, and potential additional government support for charging infrastructure. However, investors should monitor execution risks in network expansion and the impact of rising electricity costs on margins.

Looking ahead 12 months, consensus analyst estimates project revenue growth of 110% and narrowing losses, with potential profitability by late 2026. The current mean price target of $8.50 represents approximately 40% upside from current levels. While near-term volatility is likely to continue, EVgo's improving fundamentals and strategic positioning in a growing market support a positive outlook.

RECOMMENDATION: BUY - EVgo's strengthening market position, improving financial metrics, and reasonable valuation present an attractive entry point for long-term investors comfortable with above-average volatility. Set position size according to risk tolerance and maintain a 2-3 year investment horizon for best results.