Benchmark analysts initiated coverage of EVgo with a Buy rating and a $3 price target in a note Wednesday. The target represents over 50% upside from its current price.
The investment firm highlights EVgo's (NASDAQ:EVGO) focus on strategically located fast-charging stations in high-traffic areas as a key driver for future growth.
Benchmark projects EVgo to achieve positive EBITDA by the end of 2025. Their model estimates the company can add 800 charging stalls annually.
The analysts believe EVgo is well-positioned to capitalize on the rapidly growing electric vehicle market. They cite industry estimates suggesting a 30% compound annual growth rate (CAGR) for DC fast-charging ports through 2030.
According to Benchmark, EVgo's partnerships with major automakers like GM, Nissan (OTC:NSANY), and Toyota (NYSE:TM) further strengthen its market position. The Pilot Flying J partnership alone is expected to contribute 35% of EVgo's 2024 revenue, providing significant visibility for the year's performance.
Looking long-term, Benchmark sees EVgo's owned-and-operated model as potentially a "recurring cash flow machine." They estimate a 30% cash flow margin per charging stall by 2026, up from 10% in Q1 2024.
While acknowledging the current market sentiment toward de-SPACs and the broader EV sector, Benchmark believes EVgo deserves a premium valuation. They conclude by emphasizing EVgo's strategic positioning and emerging leadership in the DC fast-charging market, making it a compelling investment opportunity.