EVgo (EVGO)

Electric vehicle charging company EVgo (NASDAQ:EVGO) reported revenue ahead of Wall Streets expectations in Q3 CY2025, with sales up 36.7% year on year to $92.3 million. The company’s full-year revenue guidance of $377.5 million at the midpoint came in 2.9% above analysts’ estimates. Its GAAP loss of $0.09 per share was 19.2% above analysts’ consensus estimates.

Company Overview

Created through a settlement between NRG Energy and the California Public Utilities Commission, EVgo (NASDAQ:EVGO) is a provider of electric vehicle charging solutions, operating fast charging stations across the United States.

Renewable energy companies are buoyed by the secular trend of green energy that is upending traditional power generation. Those who innovate and evolve with this dynamic market can win share while those who continue to rely on legacy technologies can see diminishing demand, which includes headwinds from increasing regulation against “dirty” energy. Additionally, these companies are at the whim of economic cycles, as interest rates can impact the willingness to invest in renewable energy projects.

Competitors in the in the electric vehicle charging industry include ChargePoint (NYSE:CHPT), Blink Charging (NASDAQ:BLNK), and Wallbox (NYSE:WBX)

A company’s long-term sales performance is one signal of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last five years, EVgo grew its sales at an incredible 85.9% compounded annual growth rate. Its growth beat the average industrials company and shows its offerings resonate with customers.

Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. EVgo’s annualized revenue growth of 55.2% over the last two years is below its five-year trend, but we still think the results suggest healthy demand.

EVgo also discloses its number of gigawatt-hours sold, which reached 95 in the latest quarter. Over the last two years, EVgo’s gigawatt-hours sold averaged 27.6% year-on-year growth. Because this number is lower than its revenue growth during the same period, we can see the company’s monetization has risen.

This quarter, EVgo reported wonderful year-on-year revenue growth of 36.7%, and its $92.3 million of revenue exceeded Wall Street’s estimates by 0.7%.

Looking ahead, sell-side analysts expect revenue to grow 30.3% over the next 12 months, a deceleration versus the last two years. Still, this projection is noteworthy and implies the market is baking in success for its products and services.

At StockStory, we prefer high gross margin businesses because they indicate the company has pricing power or differentiated products, giving it a chance to generate higher operating profits.

EVgo’s unit economics are better than the typical industrials business, signaling its products are somewhat differentiated through quality or brand. As you can see below, it averaged a decent 30.7% gross margin over the last five years. Said differently, EVgo paid its suppliers $69.27 for every $100 in revenue.

EVgo produced a 13.6% gross profit margin in Q3, down 18.3 percentage points year on year. EVgo’s full-year margin has also been trending down over the past 12 months, decreasing by 2.6 percentage points. If this move continues, it could suggest a more competitive environment with some pressure to lower prices and higher input costs (such as raw materials and manufacturing expenses).

Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after procuring and manufacturing its products, marketing and selling those products, and most importantly, keeping them relevant through research and development.

EVgo’s high expenses have contributed to an average operating margin of negative 83.4% over the last five years. Unprofitable industrials companies require extra attention because they could get caught swimming naked when the tide goes out. It’s hard to trust that the business can endure a full cycle.

On the plus side, EVgo’s operating margin rose over the last five years, as its sales growth gave it operating leverage. Still, it will take much more for the company to reach long-term profitability.

In Q3, EVgo generated a negative 36.9% operating margin.

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Although EVgo’s full-year earnings are still negative, it reduced its losses and improved its EPS by 15.7% annually over the last five years. The next few quarters will be critical for assessing its long-term profitability. We hope to see an inflection point soon.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For EVgo, its two-year annual EPS growth of 2.5% was lower than its five-year trend. We hope its growth can accelerate in the future.

In Q3, EVgo reported EPS of negative $0.09, up from negative $0.11 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects EVgo to perform poorly. Analysts forecast its full-year EPS of negative $0.39 will tumble to negative $0.46.

If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.

While EVgo posted positive free cash flow this quarter, the broader story hasn’t been so clean. EVgo’s demanding reinvestments have drained its resources over the last five years, putting it in a pinch and limiting its ability to return capital to investors. Its free cash flow margin averaged negative 90.9%, meaning it lit $90.88 of cash on fire for every $100 in revenue.

Taking a step back, an encouraging sign is that EVgo’s margin expanded during that time. In light of its glaring cash burn, however, this improvement is a bucket of hot water in a cold ocean.

EVgo’s free cash flow clocked in at $3.32 million in Q3, equivalent to a 3.6% margin. Its cash flow turned positive after being negative in the same quarter last year, marking a potential inflection point.

Debt is a tool that can boost company returns but presents risks if used irresponsibly. As long-term investors, we aim to avoid companies taking excessive advantage of this instrument because it could lead to insolvency.

EVgo posted negative $21.24 million of EBITDA over the last 12 months, and its $261.9 million of debt exceeds the $193.5 million of cash on its balance sheet. This is a deal breaker for us because indebted loss-making companies spell trouble.

We implore our readers to tread carefully because credit agencies could downgrade EVgo if its unprofitable ways continue, making incremental borrowing more expensive and restricting growth prospects. The company could also be backed into a corner if the market turns unexpectedly. We hope EVgo can improve its profitability and remain cautious until then.

We were impressed by EVgo’s optimistic full-year EBITDA guidance, which blew past analysts’ expectations. We were also glad its full-year revenue guidance exceeded Wall Street’s estimates. On the other hand, its EBITDA missed. Overall, we think this was a decent quarter with some key metrics above expectations. The stock traded up 2.5% to $3.50 immediately following the results.

Updated: December 3, 2025 at 10:58 PM EST

Before making an investment decision, investors should account for EVgo’s business fundamentals and valuation in addition to what happened in the latest quarter.

Aside from its balance sheet, EVgo is a pretty good company. First of all, the company’s revenue growth was exceptional over the last five years. And while its projected EPS for the next year is lacking, its growth in unit sales was surging. On top of that, EVgo’s rising cash profitability gives it more optionality.

EVgo’s EV-to-EBITDA ratio based on the next 12 months is 16.1x. Certain aspects of its fundamentals are attractive, but we aren’t investing at the moment because its balance sheet makes us uneasy. Interested in this company and its prospects? We recommend you wait until its debt load falls or its profits increase.

Wall Street analysts have a consensus one-year price target of $6.54 on the company (compared to the current share price of $3.26).