Why EVgo Stock Surged by More Than 15% This Week

Given how precipitously shares of EVgo (NASDAQ:EVGO) have fallen in recent months, this week's rally in the electric vehicle (EV) charging stock may have caught many by surprise. EVgo's share price surged by 16.5% at its highest point in trading this week through 10 a.m. ET Friday, according to data provided by S&P Global Market Intelligence.

EVgo's revenue is growing steadily

EVgo last reported quarterly numbers in November, and they were impressive. Revenue surged by 234% year over year to $35.1 million in the third quarter as the company continued to build out its EV charging network and expand its customer base. EVgo also upgraded its full-year revenue guidance range to $148 million to $158 million from its previous forecast range of $120 million to $150 million. And it projected a smaller adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) loss for the year.

EVgo has yet to release its fourth-quarter numbers, but investors now perhaps expect the company to deliver a strong quarter and keep growing in 2024 despite fears of a slowdown in the growth of the global EV market. You can thank rival Blink Charging (NASDAQ:BLNK) for reigniting EVgo shareholders' hopes.

Blink Charging stock surged by a double-digit percentage, too, this week after the EV charging company said it expects to surpass its revenue guidance for Q4 and 2023, and is all set to deliver a record quarter and year. Blink Charging expects to report at least 85% growth in Q4 revenue and 129% growth in revenue for 2023, driven by strong demand for its equipment and services. It is also confident of achieving positive adjusted EBITDA by the end of this year.

Why investors are betting on EVgo stock now

One of the biggest reasons why EV charging stocks lost momentum in recent months is a slowdown in the EV industry, what with leading EV makers slashing prices to boost sales and dialing down their expectations for the near future. Blink Charging's estimate-beating numbers gave investors some hope that EVgo, too, could deliver when it reports its numbers in the coming weeks. For perspective, EVgo's guidance translates into at least 170% growth in revenue for 2023.

Should you invest $1,000 in EVgo right now?

Before you buy stock in EVgo, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and EVgo wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.

See the 10 stocks

*Stock Advisor returns as of February 12, 2024

Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.