EVgo, Inc. (NASDAQ:EVGO) Just Released Its First-Quarter Earnings: Here's What Analysts Think

The first-quarter results for EVgo, Inc. (NASDAQ:EVGO) were released last week, making it a good time to revisit its performance. Revenues of US$25m came in 5.4% below estimates, but statutory losses were well contained with a per-share loss of US$0.18 being some 14% smaller than what the analysts were predicting. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for EVgo

Taking into account the latest results, the most recent consensus for EVgo from twelve analysts is for revenues of US$139.0m in 2023 which, if met, would be a substantial 93% increase on its sales over the past 12 months. Per-share losses are expected to explode, reaching US$0.71 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$138.8m and losses of US$0.71 per share in 2023.

As a result there was no major change to the consensus price target of US$8.56, implying that the business is trading roughly in line with expectations despite ongoing losses. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic EVgo analyst has a price target of US$14.00 per share, while the most pessimistic values it at US$5.00. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting EVgo's growth to accelerate, with the forecast 140% annualised growth to the end of 2023 ranking favourably alongside historical growth of 67% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.3% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect EVgo to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for EVgo going out to 2025, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 3 warning signs for EVgo (1 is potentially serious!) that you need to be mindful of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.