EVgo said late Thursday it has finalized a $1.25 billion, low-interest loan facility from the Department of Energy to finance construction of 7,500 electric vehicle fast-charging stalls by 2029. JPMorgan analyst Bill Peterson called the news an "early holiday gift to investors." EVgo stock rose near a buy point in early Friday stock market action.
Peterson said the loan will cover 80% of project costs, with the other 20% financed by cash flows. That means investors won't see their stakes diluted by a secondary share offering to finance growth.
EVgo Stock A 'Top Pick'
JPMorgan kept an overweight rating on EVgo stock and called it a top pick within "Clean Tech."
Despite some talk that the incoming Trump administration will review last-minute loans issued by the Biden administration, Peterson said he sees minimal risk that the loan would be clawed back.
Among a trio of EV charging plays, including ChargePoint and Wallbox, EVgo is the clear standout at this point. Tesla, which agreed to open up its Supercharger network to non-Tesla EVs, remains a formidable competitor.
In its Q3 earnings presentation, EVgo highlighted that sales of non-Tesla EVs, which account for the "vast majority of current EVgo throughput," overtook Tesla sales in the U.S., 178,365 vs. 168,000.
However, President-elect Donald Trump is expected to push for repeal of the Inflation Reduction Act's $7,500 EV tax credit, which could present a stiff headwind to EV sales growth, if it happens.
EVgo Near Early Entry
EVgo stock raced up by as much as 12.5% in pre-market trading, but opened only modestly higher, trading up 2.4% to 6.37. A move past its 50-day moving average that clears Tuesday's intraday high of 7.15 would offer aggressive investors an early entry opportunity.
EVgo rocketed 60.8% on Oct. 3, when a conditional commitment for the DOE loan was first announced. It peaked just above 9.07 on Oct. 25. Shares gapped down to a 11.2% fall on Nov. 6, the day after Republicans' clean-sweep election win.
