On Friday, Cantor Fitzgerald adjusted its financial outlook for EVgo, Inc. (NASDAQ: EVGO), a company specializing in electric vehicle charging solutions as the firm increased its price target for EVgo's (NASDAQ:EVGO) shares to $5.00, up from the previous $4.00, while reaffirming an Overweight rating for the stock.
The revised price target reflects a positive adjustment based on anticipated growth in the company's network throughput for the year 2024. Cantor Fitzgerald's updated forecast projects the network throughput to reach 263.6 gigawatt-hours (GWh), an increase from the previously estimated 222.9 GWh.
The adjustment is expected to boost the company's revenue estimate for the fiscal year 2024 to $258.6 million, rising from the earlier forecast of $248.9 million.
Cantor Fitzgerald's valuation of EVgo is grounded in a 10-year discounted cash flow (DCF) analysis. The firm maintains its financial modeling assumptions, including a 2.5% terminal growth rate and a weighted average cost of capital (WACC) of 12%, which aligns with the current industry standards.
EVgo, a leader in electric vehicle charging networks, has reported substantial growth in its recent earnings call. The company announced a significant revenue increase in the second quarter of 2024, surpassing $66 million, marking a 32% year-over-year revenue increase. Additionally, EVgo noted a considerable rise in customer accounts, now exceeding 1 million.
The growth is also reflected in its expansion plans, as it aims to add up to 900 new charging stalls within the year. These recent developments indicate a positive trajectory for EVgo, as it aims to reach its financial milestone of adjusted EBITDA breakeven by 2025.
Cantor Fitzgerald has reaffirmed this positive outlook by increasing its price target for EVgo's shares to $5.00, up from the previous $4.00.
InvestingPro Insights
In light of the recent analysis by Cantor Fitzgerald, it's worth noting some real-time data and InvestingPro Tips for EVgo, Inc. (NASDAQ:EVGO) that could provide additional context for investors. According to InvestingPro, EVgo has a market capitalization of approximately $1.09 billion and has shown an impressive revenue growth of 82.01% in the last twelve months as of Q2 2024. This aligns with Cantor Fitzgerald's positive outlook based on the company's anticipated growth in network throughput.
InvestingPro Tips highlight that EVgo holds more cash than debt on its balance sheet and analysts anticipate sales growth in the current year. These factors could contribute to the company's ability to invest in expanding its network and services. Moreover, the stock has experienced a strong return over the last three months, with a 90.53% price total return, which may interest investors looking for momentum in stock performance.
For those interested in exploring further, InvestingPro offers additional tips on EVgo, including insights on valuation and profitability. There are 13 InvestingPro Tips available, which delve deeper into the company's financial health and market position, accessible at https://www.investing.com/pro/EVGO.
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