EVgo upgraded at Credit Suisse despite revenue miss

May 12, 2022 9:08 AM ETEVgo, Inc. (EVGO)By: Kevin P. Curran, SA News Editor2 Comments

EVgo Fast Charging station

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Evgo Inc.’s (NASDAQ:EVGO) pipeline, partnerships, and potential government incentives provide a prescient opportunity to investors, per Credit Suisse.

For its earnings release on Wednesday, the fast charging network for electric vehicles reported lighter losses than anticipated, but missed slightly on sales figures. Despite the narrow miss, Credit Suisse analyst Maheep Mandloi upgraded the stock on Thursday to a “Buy” equivalent following its Wednesday evening earnings release, indicating shares are undervalued at present.

He pointed to the reaffirmed guidance and slate of partnerships and firmer profit trajectory present a bullish outlook for shares in the long term.

“The company continues to build upon its partnerships that help drive revenue growth - charging credit relationships with Toyota and Subaru with both companies expected to launch new EV models this year, a new partnership in April with Chase Bank to build stations at 50 retail locations, and added sites with shopping center operators Regency Centers and Brixmor,” he explained. “We also note that the guidance doesn’t incorporate the $615m being made available later this year to developers such as EVgo as part of the National Electric Vehicle Infrastructure Program.”

The new program is expected to come online either in the late fourth quarter or early in 2023. If the program does offer a benefit into the year-end, the reaffirmed outlook would certainly have significant upside.

“We upgrade to Outperform as valuation looks attractive after [year to date decline of 27%] and we see multiple tailwinds for faster EV charging growth and potential incentives from distribution of federal infrastructure funds,” Mandloi concluded.

Alongside his newly-minted “Buy” rating he assigned a $14 price target, suggesting a significant premium to Wednesday’s closing price of $7.17.

Read the earnings call transcript.

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