Muted Expectations Give EVgo Stock Holders a Nice Earnings Surprise

EVGO stock - Muted Expectations Give EVgo Stock Holders a Nice Earnings Surprise

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Based in Los Angeles, charging-station manufacturer EVgo (NASDAQ:EVGO) has over 850 fast-charging locations in its network. Still, Wall Street’s experts aren’t expecting EVgo to turn a profit anytime soon. But then, setting a low bar could lead to an unexpected bump in EVGO stock. That bump might happen soon, as EVgo released its first-quarter 2022 financial results on May 11. This event offers an opportunity for EVGO stock to recover from its recent slump. After hitting a 52-week high of $19.59 late last year, the stock came down to the $9 level not too long ago.

Bear in mind, so-called growth stocks have been beaten down in 2022. So, it’s easy to see why the investing community has put EVgo in the doghouse, at least for now.

The skeptics might call EVGO a failed growth stock, but they can’t deny that EVgo is a growing company. For instance, EVgo recently added four fast electric vehicle (EV) chargers at a Maryland location. With that, the company’s total number of charging stalls across the state of Maryland now exceeds 100.

Nevertheless, some analysts didn’t seem particularly enthused about EVgo’s financial prospects, especially in the near term. Reportedly, the analyst community expected EVgo to announce a 10-cent per share quarterly earnings loss.

Here’s where it gets really interesting, though. Cantor Fitzgerald analyst A. Sheppard expected EVgo to post a loss of $1.76 earnings per share for 2022. That’s rather pessimistic, yet Cantor Fitzgerald also has an “overweight” rating and a $14 price target on EVGO stock. JPMorgan Chase & Co. (NYSE:JPM) analysts also have a $14 price target on the stock, while the analysts at Tudor, Pickering, Holt & Co. envision the stock going to $16. It almost seems like investors are getting mixed messages — is Wall Street pessimistic on EVgo, or optimistic?

As it turns out, EVgo posted revenue of $7.7 million for 2022’s first quarter, up 86% year-over-year. Also, the company reported a per-share earnings loss of 21 cents. The real headline news, though, is that EVgo’s gross loss of $0.6 million in the first quarter of 2022 marked a dramatic improvement over the gross loss of $1.7 million from the year-ago quarter. Using that metric, we can conclude that EVgo is at least on the right fiscal track.

Perhaps the best strategy is to ignore the mixed messages and focus on EVgo’s growth as a company, which is impressive. Whatever happens in the near term, investors could be able to book outsized profits eventually if the EVgo share price reaches $14 or $16. So, don’t underestimate the power of the fast-charging revolution or of EVgo’s exciting growth story in 2022.

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 Publishing Guidelines.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.

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