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As you might know, EVgo, Inc. (NASDAQ:EVGO) recently reported its first-quarter numbers. It wasn't the greatest result, with ongoing losses and revenues of US$7.7m falling short of analyst predictions. The losses were a relative bright spot though, with a per-share statutory loss of US$0.21 being moderately smaller than the analysts forecast. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the consensus forecast from EVgo's ten analysts is for revenues of US$50.7m in 2022, which would reflect a sizeable 97% improvement in sales compared to the last 12 months. Losses are forecast to balloon 1,208% to US$1.01 per share. Before this latest report, the consensus had been expecting revenues of US$51.1m and US$0.96 per share in losses. Overall it looks as though the analysts were a bit mixed on the latest consensus updates. Although sales forecasts held steady, the consensus also made a moderate increase in its losses per share forecasts.
The consensus price target held steady at US$14.67, seemingly implying that the higher forecast losses are not expected to have a long term impact on the company's valuation. 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. Currently, the most bullish analyst values EVgo at US$22.00 per share, while the most bearish prices it at US$9.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting EVgo's growth to accelerate, with the forecast 147% annualised growth to the end of 2022 ranking favourably alongside historical growth of 74% per annum over the past year. 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 important thing to note is the forecast of increased losses next year, suggesting all may not be well at EVgo. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are 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. We have forecasts for EVgo going out to 2024, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with EVgo , and understanding them should be part of your investment process.
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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.