Evgo Inc. (NASDAQ: EVGO), which secured a guaranteed $1.25-billion loan facility with the US Department of Energy, is up 10% on premarket Friday.
Evgo plans to use the loan for another 7,500 charging stations across America.
After the construction, the company expects to have about 10,000 charging stations for electric cars.
Evgo’s stock price is still down by close to 25 percent from its high for the year.
What is the importance of the DOE loan for Evgo stocks?
Evgo wants the 10,000 fast charging stalls mentioned above to be owned and operated by Evgo in 2029.
In order to strengthen the company’s position as a leading EV infrastructure, it is looking at a network expansion of more than three times in five years.
In a release issued today, Evgo’s chief executive Badar Khan said that the company is well-positioned for deployment of infrastructure to support current and future investments domestically in transport electrification.
This news comes just days after Evgo, General Motors and other automotive companies were reported as having exceeded 2,000 fast-charging EV charging stations co-branded in the US.
Evgo’s stock has risen 250% since its low for the year.
JPM remains bullish on Evgo Inc
Evgo is expecting to create over 1,000 jobs in the US by using the loans from the federal government to construct new fast charging stalls.
Analysts at JPMorgan believe that the DOE announcement was a “pre-holiday gift” to Evgo’s shareholders.
They added that the loan facility would serve as an important catalyst to boost the share price of their company.
JPM anticipates Evgo will focus on achieving operational milestones, which in turn will boost the financials of EV and unleash further upside for its stock.
According to investment firm, “Evgo’s owner-operator fast charging model is scaling better than other hardware-software competitors with increased utilization and charge rate in the current muted EV climate.”
Evgo does not pay dividends at this time.
Do Evgo share prices have any more upside?
JPMorgan believes that Evgo will benefit from “a higher utilization of every charger in its network”.
The company’s third quarter revenue grew by 92% on an annualised basis to $67.5 Million, which indicates a strong demand for the fast-charging stations.
A record quarter also showed an improvement in EBITDA adjusted. Evgo’s customer base is more than 1.2 millions at the time of writing.
Evgo has also increased its revenue guidance in November. Badar Khan, CEO of Evgo at that time, told investors:
Evgo will be the leading charging company in the future. Our next phase of expansion will be driven by our commitment to deliver sustainable and continued value to our investors.
Crispus Nyaga, our market analyst, expects Evgo to exceed $12 by 2025.
The post Why did Evgo stocks jump 10% on Friday was modified as updates unfolded. This post may change as new information unfolds
