On Friday, Benchmark maintained its Buy rating on EVgo, Inc. (NASDAQ:EVGO) shares with a steady price target of $12.00. The electric vehicle charging network recently secured a substantial $1.25 billion loan from the Department of Energy (DOE) to enhance its infrastructure. This financial boost is set to underpin the company's expansion plan, which includes adding 7,500 new fast-charging stalls.
The loan is a significant milestone for EVgo, which aims to increase its current stall count from around 3,500 in 2024 to an estimated 11,000 by 2029. This growth does not account for additional stalls that may be constructed without DOE loan funds.
According to the company's projections, once the 11,000 stall target is reached, EVgo expects to see a gross profit margin exceeding 40% and an adjusted EBITDA between $300 million and $425 million.
The financial agreement with the DOE is structured to commence with an initial drawdown of $75 million in January 2025. Benchmark's analysis sees the timely closure of this loan as a reaffirmation of EVgo's (NASDAQ:EVGO) strong execution capabilities and its prominent position within the electric vehicle charging industry.
Benchmark's endorsement to buy EVgo shares is based on the company's clear trajectory for growth and profitability, as outlined by its ambitious expansion strategy and the secured DOE loan. The analyst firm underscores the opportunity for investors to engage with EVgo at the reaffirmed price target of $12.00.
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