By now, in light of the recently passed U.S. infrastructure bill, you shouldn’t need to be convinced that the electric vehicle revolution is under way. It’s a done deal at this point, and charging-station manufacturer EVgo (NASDAQ:EVGO) seeks to be a major part of this revolution. So, could EVGO stock be poised for a big move?
As we’ll see, one big bank analyst seems to believe that the stock is ready to run. While investors shouldn’t base their trades on one expert’s prediction, it can’t hurt to hear what a respected analyst has to say.
Granted, there’s increasing competition as the EV charging-port market becomes a crowded field. The billion-dollar question, then, is: what sets EVgo apart from the rest?
For one thing, the company has a number of value-added partnerships. Besides, as EVgo quickly builds out its charging-station network, the company is becoming a serious threat to the competition.
A Closer Look at EVGO Stock
EVGO stock debuted on July 2, 2021, opening its first trading session at $15.
It was a bumpy ride after that, unfortunately. By Sept. 20, the share price had already declined to $7 and change.
Then, a modern miracle occurred as EVGO stock unexpectedly rallied to around $20 in November. Stay tuned, as that price point will become important again.
Recently, the sellers took control of the stock, sending it to $12. Don’t be surprised if volatility persists through the end of the year, and into early 2022. It’s still too early to establish any meaningful support levels, though anything near $10 should be an attractive price for prospective investors.
Deals and More Deals
The infrastructure bill was a big deal for the EV charging market, but it wasn’t the only big deal in 2021.
Not long ago, InvestorPlace contributor Larry Ramer summarized a pair of significant deals that EVgo made. To get the full scoop, I invite you to read that article.
For an abridged version, I’ll start with EVgo’s collaboration with General Motors (NYSE:GM). Building upon a previous deal, the two companies now plan to develop a network of 2,750 charging stalls through 2025. With that, General Motors and EVgo will extend the geographic reach of this build-out from 40 metropolitan markets to 52.
Next, EVgo disclosed an expansion to its EV charging program for ride-share drivers on Uber’s (NYSE:UBER) platform. Drivers using Uber will continue to be able to access EVgo’s member rates without any monthly fees. Furthermore, drivers with Uber Pro Gold, Platinum or Diamond status will unlock even lower EVgo Plus rates.
A Major Milestone, and the Road to $20
In case all of that isn’t enough to convince you, EVgo also just struck a big-money deal in America’s EV mecca: California.
Reportedly, EVgo was selected by the state of California for proposed awards of $1.7 million in grant funding to build 38 charging stalls, including 18 charging stalls at a large site in Los Angeles.
It’s no wonder, then, that JPMorgan analyst Bill Peterson cited “attractive and growing partnerships” when he initiated coverage of EVgo with an “overweight” rating and a $20 price target. Peterson views EVgo as a leader in the fast-charging electric vehicle space. It’s hard to argue with him, as the company has more than 800 fast-charging locations now.
Apparently, over 130 million people in the U.S., and more than 80% of Californians, live within a 10-mile drive of an EVgo fast charger.
Clearly, the company’s charging-port network is expanding quickly. And soon enough, more Wall Street analysts should come to appreciate EVgo’s value proposition.
The Bottom Line
More time needs to pass before a meaningful price range can be established for EVGO stock.
Nevertheless, $20 seems like a reasonable price target. There’s no denying that EVgo has “attractive and growing partnerships,” as Peterson put it.
And of course, the infrastructure bill should provide an additional tailwind. So, even in an increasingly crowded EV charging-station market, there should be plenty of room for EVgo to grow.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
