Is EVgo (NASDAQ:EVGO) A Risky Investment?

David Iben put it well when he said, 'Volatility is not a risk we care about. What we care about is avoiding the permanent loss of capital.' So it seems the smart money knows that debt - which is usually involved in bankruptcies - is a very important factor, when you assess how risky a company is. Importantly, EVgo, Inc. (NASDAQ:EVGO) does carry debt. But should shareholders be worried about its use of debt?

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What Risk Does Debt Bring?

Debt is a tool to help businesses grow, but if a business is incapable of paying off its lenders, then it exists at their mercy. If things get really bad, the lenders can take control of the business. However, a more common (but still painful) scenario is that it has to raise new equity capital at a low price, thus permanently diluting shareholders. Of course, the upside of debt is that it often represents cheap capital, especially when it replaces dilution in a company with the ability to reinvest at high rates of return. When we think about a company's use of debt, we first look at cash and debt together.

How Much Debt Does EVgo Carry?

As you can see below, at the end of March 2025, EVgo had US$76.3m of debt, up from none a year ago. Click the image for more detail. But it also has US$150.0m in cash to offset that, meaning it has US$73.7m net cash.

A Look At EVgo's Liabilities

Zooming in on the latest balance sheet data, we can see that EVgo had liabilities of US$110.9m due within 12 months and liabilities of US$322.2m due beyond that. On the other hand, it had cash of US$150.0m and US$62.1m worth of receivables due within a year. So it has liabilities totalling US$221.0m more than its cash and near-term receivables, combined.

While this might seem like a lot, it is not so bad since EVgo has a market capitalization of US$1.08b, and so it could probably strengthen its balance sheet by raising capital if it needed to. But we definitely want to keep our eyes open to indications that its debt is bringing too much risk. While it does have liabilities worth noting, EVgo also has more cash than debt, so we're pretty confident it can manage its debt safely. There's no doubt that we learn most about debt from the balance sheet. But ultimately the future profitability of the business will decide if EVgo can strengthen its balance sheet over time. So if you're focused on the future you can check out this free report showing analyst profit forecasts.

View our latest analysis for EVgo

Over 12 months, EVgo reported revenue of US$277m, which is a gain of 45%, although it did not report any earnings before interest and tax. With any luck the company will be able to grow its way to profitability.

So How Risky Is EVgo?

Statistically speaking companies that lose money are riskier than those that make money. And in the last year EVgo had an earnings before interest and tax (EBIT) loss, truth be told. And over the same period it saw negative free cash outflow of US$92m and booked a US$46m accounting loss. But at least it has US$73.7m on the balance sheet to spend on growth, near-term. With very solid revenue growth in the last year, EVgo may be on a path to profitability. By investing before those profits, shareholders take on more risk in the hope of bigger rewards. When analysing debt levels, the balance sheet is the obvious place to start. But ultimately, every company can contain risks that exist outside of the balance sheet. Be aware that EVgo is showing 3 warning signs in our investment analysis , you should know about...

When all is said and done, sometimes its easier to focus on companies that don't even need debt. Readers can access a list of growth stocks with zero net debt 100% free, right now.

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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.