Shares of EVgo (EVGO) - Get EVgo, Inc. Class A Report were rising Thursday after analysts at JPMorgan initiated coverage of the electric vehicle charging operator at a buy-equivalent overweight rating and a price target of $20 a share.
"We anticipate the company driving outsized revenue growth on rapidly increasing fleet adoption and higher utilization," wrote Bill Peterson in a note to investors on Thursday.
"EVgo is a market leader in DC [direct current] fast charging, generating revenue streams from its installed charger base and prudently adding capacity as utilization increases," Peterson added.
Shares of the Los Angeles-based company at last check rose 6.65% to nearly $13 a share
"We see a compelling use case for fast charging, especially in the retail and fleet segments where the company has strong and growing partnerships, and we expect the company to benefit from the rapid growth of the overall EV market over the mid- and long-term," the investment firm noted.
JPMorgan expects an increase in EVgo's subscription-like revenue, with potential margin upside through increasing software contributions and better energy rates.
"This growth could further accelerate if the Build Back Better reconciliation bill passes in the U.S. The company could also see margin upside from its work with governments and utilities to secure more competitive energy rates," Peterson added.
Stations that are part of the program are now live in eight states, including in Georgia, Florida, Pennsylvania, Colorado and North Carolina.
The joint program will further accelerate widespread EV adoption and increase public access to charging, including in future markets in Alabama, Wisconsin, Kentucky, Michigan, Ohio and Texas, EVgo said in a statement.