EVgo Shares Slide Despite Wall Street Beat

EVgo Shares Slide Despite Wall Street Beat
EVgo chargers at a Santa Monica facility.

EVgo Inc.’s first-quarter earnings sent its stock price down. 

Shares of the West L.A.-based electric vehicle charging station and infrastructure company declined by about 10% on May 7, when its shares closed at $1.79.

The decrease came despite EVgo’s first-quarter financials beating Wall Street estimates on earnings and revenue.

EVgo reported before the market opened on May 7 a net loss of $9.8 million (-9 cents a share) for the quarter ending on March 31, compared with a net loss of $13 million (-18 cents) in the same period of the previous year. Revenue increased by 118% from the first quarter of the prior year to $55.2 million. 

Analysts on average expected earnings of 11 cents a share on revenue of $52.4 million, according to LSEG, a provider of financial markets data.

DC fast-charging award

On May 1, EVgo announced it had received a first place Leadership Award for Level 3 electric vehicle charging – also known as DC fast charging – by the Los Angeles Department of Water and Power at the utility’s 9th annual Sustainability Awards. That day the stock price went up by about 5% to close at $1.90, from the previous day’s $1.81.

Shares closed at $1.99 on May 9.

Badar Khan, chief executive of EVgo, said that the business continues to grow and demonstrates the strength of its model of owning and operating a fast-charging network as more Americans drive electric vehicles.

“We continue to build new stalls across the U.S. and see throughput growth outpacing growth of (electric vehicles) in operation,” Khan said in a statement. “EVgo’s compelling unit economics, operating leverage, along with the tailwind of long-term EV adoption, gives us confidence that we will achieve adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) breakeven in 2025 and create significant shareholder value.”

During the quarter, the company added 250 electric charging stations, including under its white label brand EVgo eXtend, for a total of 3,780 station either operating or under construction at the end of the quarter.

Network throughput increased to 53 gigawatt hours in the first quarter of 2024, compared to 18 gigawatt hours in the first quarter of 2023, representing a 194% year-over-year growth, the company said.

A gigawatt hour is a unit of energy that is equal to 1 million kilowatt hours.

In a conference call with analysts to discuss the first-quarter financial results, Khan called the results “great” and “excellent.”

“With the operating leverage in the business we expect we could have annual adjusted EBITDA of $200 million in three to five years’ time, representing a very compelling investment,” Khan said.

In addressing the news that Tesla was laying off its entire staff of employees working on charging stations, Khan said that if the decision was made to allow the company to focus on developing more affordable vehicles, then it will be a positive for electric vehicle adoption.

“We know from experience both here in the U.S. as well as in other countries that affordability is a key driver of mass adoption,” he added.

Companies like EVgo are now adding public charging stations at a pace that didn’t exist when Tesla began it supercharger business in 2012, he continued.

According to EVAdoption, an analysis and forecasting firm for the EV industry, Tesla had opened just more than 2,000 new electric charging ports this year through April, while EVgo had opened about 293 in the same period. 

“In fact, I expect capital will be more interested in participating in the space in this new competitive context, allowing companies like EVgo to plug the gap left behind and accelerate their charging station growth,” Khan said.

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