Just like how electric vehicle (EV) stocks experienced wild swings in recent months, so too have shares in EVgo (NASDAQ:EVGO). An operator of EV charging stations, EVGO stock skyrocketed in price thanks to the bipartisan infrastructure bill getting signed into law.
Since then, recent market worries have largely sent it back to where it was before its recent rally. Down around 25% in the past month, it’s changing hands for around $10.21 per share today.
This latest wave of fear, uncertainty and doubt could affect it further in the short term. Even so, now may be the time to buy, when the crowd is bailing on it.
For starters, the EV industry has only started to take off. In the years ahead, as electric-powered cars and trucks gain critical mass, the charging industry will experience tremendous growth. Along with this, there’s the fact that, despite its lower name recognition, it’s far from being an “also ran.”
Between its high share of the DC fast charger market, and the partnerships it has made within the automotive industry, it has more potential than the market’s current view of it would suggest. In other words, if you’re looking for more under-the-radar EV plays, this is one of your best options.
EVGO Stock At a Glance
The strong performance of EV stocks up until a month ago may have sparked hope that this sector would continue trending higher into 2022. Alas, it doesn’t appear to be playing out that way. In fact, the opposite may happen in the months ahead.
As enthusiasm for growth stocks continues to cool, EV stocks, including EVGO stock will likely continue to either waffle in price, or could see a further drop. Again though, that’s not to suggest that the opportunity to profit from these plays has come and gone.
With electric vehicles projected to go from around 5.6% of car sales today, to perhaps as high as 52% by 2030, it’s clear things are just warming up for this sector. That’s the case whether we are talking about EV manufacturers, or EV infrastructure names like this one. Now, you may be thinking, with so many contenders in this space, why decide to choose this charging play instead?
Given its partnership deals, network expansion plans and current position in the DC fast charger segment, it has a strong chance of ultimately capturing a large share of this market.
Partnerships, Focus on DC Fast Charging Key to Its Future Success
Compared to its more high-profile rivals, including one that touts having 70% market share, you may still think it is a small fry operator, at risk of getting squeezed out by larger players. My response? Take a closer look at the details. By doing that, you’ll see that this is a short-sighted view to have about the company, and about EVGO stock.
I’ll admit that this company isn’t the largest charging station operator. But it does hold a commanding lead of a key segment of the market. It’s important to note that not all charging stations are the same. There are different levels of EV charging. Most public stations are Level 2, which can charge 12 to 80 miles of range per hour. EVgo’s stations, however, are all Level 3 DC fast charging stations. These higher-voltage stations charge at a pace of 3 to 20 miles per minute, enabling you to get back to full range in a much shorter period of time.
Already the largest operator of DC fast charging (DCFC) stations, it could have a big advantage, as EVs become more widely used, and demand rises for speedy recharging. Thanks to a partnership deal with a major automaker, it’ll become a larger force in the DCFC space. This partnership, which will triple the size of its charging network by 2025, is just one it has made with major names in the automotive sector.
Another noteworthy partnership is the one it has entered into with a leading ride-share company.
With these partnerships, plus other strengths, JP Morgan analyst Bill Peterson recently made a bullish call on shares. The analyst gave the stock the equivalent to a “buy” rating, and a $20 per share price target.
The Verdict on EVGO Stock
Earning a “B”-rating in my Portfolio Grader, many have erroneously passed up on this EV charging play. It’s unclear when exactly sentiment for the electric vehicle sector will swing back to positive. However, when does it happen? Based on the many strengths discussed above, EVgo could finally get the attention it deserves.
Now may be the time to charge up your portfolio with EVGO stock … before the market finally realizes its potential.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
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