Fast charging network company EVgo (EVGO -1.64%) is growing impressively. After delivering 52% revenue growth in 2021, the company expects to grow its revenue by another 132% this year. It is also looking to significantly expand its network of charging stations.
Let's analyze if EVgo stock makes an interesting buy right now.
Why is EVgo stock rising?
EVgo's stock price rose around 29% in the first quarter. By comparison, ChargePoint Holdings' stock rose about 4%, while Blink Charging's stock was flat. Volta's stock, which fell sharply after its founder and co-founder resigned, is down 58% for the quarter.
So EVgo stock is outperforming its peers in this year. A string of announcements likely contributed to the stock's significant rise. In February, EVgo announced partnerships with two top automakers, Subaru and Toyota. While Subaru has selected EVgo as the preferred electric vehicle (EV) charging partner, Toyota's bZ4X SUV customers will receive one year of complimentary charging at EVgo stations.
EVgo has a network of more than 800 public fast charging locations and over 1,200 level 2 charging stalls. Apart from the new OEM partnerships, the company already has partnerships with General Motors and Nissan.
EVgo also received $3.6 million in grants recently from the California Energy Commission to develop 72 charging stalls in California. Finally, the company's strong fourth-quarter performance helped in boosting its stock's price.
The number of EVgo customers are also increasing over time.
Strong growth in customers
EVgo had 340,000 customer accounts on its network at the end of 2021. The number of accounts grew 47% during the year.
As the chart shows, EVgo's customer accounts are growing consistently for the past six quarters. Around 109,000 customer accounts were added to the company's network last year. EVgo estimates that this number represents roughly 80% of non-Tesla electric vehicle sold in the U.S. last year. EVgo establishes partnerships with OEMs, site hosts, and fleet operators that help in customer account growth.
Though EVgo is growing fast, the company is several years away from becoming profitable. It depends on its partners for growth. EVgo's top two commercial partners account for nearly 24% of its revenue.
In short, EVgo is progressing well and has immense growth potential, considering the increase in EVs and the rising demand for charging infrastructure. However, the stock is suitable only for investors with a high appetite for risk.