What happened

Shares of EVgo (EVGO 0.77%) crashed on Monday, slumping by 14.3% as of 12:45 p.m. EST. Today's drop brings the electric vehicle (EV) charging stock's seemingly unstoppable ride from last week to a grinding halt. An analyst downgrade is to blame.

So what

This morning, Credit Suisse analyst Maheep Mandloi downgraded his rating on EVgo to neutral from outperform, citing the stock's recent rally that already appears to have baked in the potential benefits of EVgo's recent partnerships and the infrastructure bill. Mandloi also sees EVgo facing competition from new entrants despite its first-mover advantage.

He still raised his price target on the stock to $17 a share from $11, but with EVgo shares closing Friday at $18.90, the stock has now tumbled below $17 as of this writing.

A worried person studying a falling graph on a laptop.

Image source: Getty Images.

EVgo shares stunned the markets last week by nearly doubling in value on multiple catalysts. The passage of President Joe Biden's $1.2 trillion infrastructure bill was the biggest one, as it includes $7.5 billion worth of investment on building a network of 500,000 EV chargers across the U.S.

With EVgo also extending its partnerships with Uber Technologies to provide its drivers with greater incentives to use EVgo's services, and with General Motors to build another 500 charger stalls, the stock continued to rally. To add fuel to the fire, EVgo delivered a surprise profit for its third quarter and upgraded its full-year outlook.

EVGO Chart

EVGO data by YCharts.

Now what

To be sure, EVgo wouldn't have turned a profit in the third quarter if not for one-time gains unrelated to core operations. But EVgo's fast chargers have strong prospects, especially as they also run entirely on renewable energy. With Biden's infrastructure program placing strong emphasis on renewable energy, many believe EVgo's chargers could see stronger demand.

That said, EVgo shares undeniably ran up too much, too fast. And with the stock still commanding a stunning market capitalization of around $4.4 billion even after today's price drop, it's not surprising to see some analysts turning cautious and traders taking profits off the table.