Street Calls of the Week
LOS ANGELES - EVgo Inc. (NASDAQ: NASDAQ:EVGO), a prominent public fast charging provider for electric vehicles (EVs) with a market capitalization of $1.35 billion, has announced the receipt of a $75 million drawdown from a $1.25 billion loan guaranteed by the U.S. Department of Energy (DOE). This funding, obtained through the DOE's Title 17 Clean Energy Financing Program, marks the first installment to support the company's extensive plan to enhance public charging infrastructure across the United States. According to InvestingPro data, EVgo maintains a strong liquidity position with a current ratio of 2.19, indicating its ability to meet short-term obligations effectively.
The loan, which reached financial close in December 2024 after an 18-month review process, is set to facilitate the construction of approximately 7,500 new public fast charging stalls. With this expansion, EVgo aims to grow its network to a minimum of 10,000 fast charging stalls by 2029. The company has already commenced the development of new charging stations financed by the loan, focusing on amenity-rich locations to provide drivers with access to retail, dining, and shopping while they charge their vehicles.
EVgo's CEO, Badar Khan, highlighted the significance of the DOE's low-cost financing in tripling the company's network size and fostering operational and financial growth. The company has demonstrated strong momentum, with InvestingPro analysis showing impressive revenue growth of 73% in the last twelve months and analysts forecasting 61% growth this year. The initiative is expected to play a crucial role in bolstering consumer confidence in EV range and supporting the automotive industry's shift toward electrification. Over 30 new affordable EV models are anticipated to hit the market by the end of 2025, in addition to the more than 70 models currently available, which aligns with the rising demand for reliable and accessible charging solutions.
As the EV market continues to expand, EVgo's strategic deployment of charging stations aims to meet the increasing needs of drivers and contribute to the broader adoption of electric vehicles. The company's commitment to developing a comprehensive charging network is further supported by its Innovation Lab, where interoperability testing and technical collaborations with automakers and industry partners are conducted to advance the EV charging landscape.
This news comes with the understanding that forward-looking statements regarding future drawdowns and the projected benefits of the DOE loan facility involve certain risks and uncertainties. The stock has shown significant momentum with a 58% gain over the past six months, though InvestingPro analysis indicates the stock is currently trading near its Fair Value. EVgo's financial filings with the Securities and Exchange Commission detail these factors, which could potentially alter the anticipated outcomes. For deeper insights into EVgo's valuation and growth prospects, investors can access comprehensive Pro Research Reports available on InvestingPro, covering over 1,400 US stocks including EVgo.
The information provided is based on a press release statement from EVgo.
In other recent news, EVgo has experienced significant developments. The electric vehicle charging network recently completed a $1.25 billion loan agreement with the U.S. Department of Energy (DOE), providing the company with substantial capital for its aggressive expansion plans. This includes the installation of 7,500 new fast-charging stalls, as stated by both Stifel and Benchmark in their recent analyst notes, maintaining their Buy ratings with price targets of $10 and $12, respectively.
In addition, EVgo's affiliate, under LS Power Equity Partners IV, L.P., announced a secondary public offering of 23 million shares of Class A common stock. This sale, led by prominent financial institutions like JP Morgan and Goldman Sachs, was priced at $5 per share, a significant discount from the stock's last closing price. The company will not financially benefit from this offering, as all proceeds will go to LS Power.
These are recent developments that highlight EVgo's continued momentum and strategic moves in the electric vehicle charging industry. As the company moves forward with its expansion plans, it aims to grow its infrastructure, increase profitability, and remain a strong player in the sector.
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