What happened
Charging infrastructure company EVgo (EVGO -1.71%) sparked a rally in several electric vehicle (EV) sector names Thursday morning after it blew away fourth-quarter expectations. EVgo shares shot up 30% before paring some of those gains.
As of 1:40 p.m. ET, the stock remained higher by 23%. Fellow charging network company ChargePoint Holdings (CHPT -3.73%) and EV battery technology company QuantumScape (QS -1.97%) also rose by as much as 5% and 3.5%, respectively, at the day's highs. Excitement for those stocks waned some with ChargePoint higher by just 0.7% and QuantumScape nearly breakeven by early afternoon.
So what
EVgo surprised investors with revenue of $27.3 million in the fourth quarter when analysts expected a range of just $20 million to $22 million. That represented an increase of 283% compared to the prior-year period. The company also beat on the bottom line, reporting a $0.06 loss per share versus an expected loss of $0.16 per share.
The company said its contract with truck stop operator Pilot Flying J helped drive the increase in the number of chargers EVgo added. Pilot is 80% owned by Warren Buffett's Berkshire Hathaway. EVgo also has a partnership to provide fast-charging stations for General Motors, which also helped drive growth in its business.
Image source: Getty Images.
Now what
EVgo still remains small compared to charging station leader ChargePoint. EVgo said it ended the fourth quarter of 2022 with over 2,800 fast-charging stalls in operation or under construction. By comparison, ChargePoint reported earlier this month that it had almost 19,000 activated DC fast-charging ports and more than 225,000 total charging ports.
ChargePoint is also partnering with EV makers including Fisker to help support overall EV penetration. And it's growing sales quickly. Revenue jumped 93% in its fourth quarter and almost doubled to $468 million in its full fiscal year 2023, ended Jan. 31.
EVgo projects it will generate sales of between $105 million and $150 million for its full year 2023. That would be a similar growth rate to ChargePoint on the low end, and annual growth of 175% on the high end of the range.
But neither EVgo nor ChargePoint is profitable at this point. QuantumScape is similarly a speculative company as it develops its solid-state battery technology. It hasn't begun generating revenue yet. But QuantumScape has also made progress in its development.
Investors are starting to bet that the charging and battery infrastructure will indeed support the pace of EV adoption. Including today's spike, EVgo shares have soared nearly 60% year to date. If it can continue to grow at the rate it just reported, there could be more to come.
