Trained Market Monkey

Maurice was spotted pacing back and forth in front of his monitor, occasionally hurling half-eaten bananas at a chart of EVgo’s stock price while muttering something about “infrastructure plays that don’t actually have infrastructure profits yet.”

Listen, I need to be honest with you from the jump. EVgo—the nation’s largest public fast-charging network for electric vehicles—is the kind of stock that makes Maurice’s tail twitch with genuine excitement AND genuine anxiety simultaneously. It’s like being offered a perfectly ripe banana that might actually be one day away from fermentation. The upside case is intoxicating. The downside case is… well, it involves a lot of red bananas.

Let me explain what’s happening here, because EVgo’s story is far more complicated than the cheerful headlines about “the EV revolution” would have you believe.

The Sizzling Revenue Number Everyone’s Talking About

First, the good news that got Foxy excited: EVgo posted 75.5% revenue growth. That’s real. That’s not a typo. In a market where most growth stocks are managing mid-teens expansion, watching a company pump out three-quarters growth in a single period will make any portfolio manager’s eyes water. The federal government is literally mandating EV charging infrastructure. The Biden Administration’s infrastructure bill is funneling money into charging networks. Fleet operators are electrifying. Tesla’s opening up its Supercharger network to other manufacturers. On the surface, EVgo should be swimming in opportunity.

And yet.

Here’s where Maurice has to put down the bananas and get serious for a moment: that explosive revenue growth is doing something peculiar. It’s not translating to profit. Not even close. EVgo burned through $117 million in free cash flow last quarter while running a negative 10.8% profit margin. Let me translate that to monkey-speak: they’re selling more charging sessions, yes, but they’re losing money on nearly every single one.

This is infrastructure-business classic. You build out the network (expensive). You charge customers to use it (less expensive than building). You pray that at scale, the unit economics flip positive before your cash reserves run dry. It’s like planting a massive banana plantation and eating the profits while saplings grow. Eventually, those trees will produce. Maybe. Hopefully. But right now, you’re just hemorrhaging.

The Valuation Trap

Here’s what Foxy’s thesis leans on: EVgo is trading at $1.89, well below its 50-day moving average of $2.41, and the recommendation suggests this is “institutional accumulation” before a breakout. Maurice respectfully disagrees with the framing. What we’re actually seeing is a stock that was $5.18 a year ago—nearly three times today’s price—that’s been getting systematically hammered.

Why? Because the market is realizing something: fast-charging networks are brutally capital intensive, the unit economics are murky, and profitability timelines keep extending. UBS just lowered their price target to $5.50. That’s still $3.60 above where the stock trades now, sure. But UBS also just lowered it from $5.90. The direction matters more than the destination.

The debt-to-equity ratio of 80.6 is what made Maurice’s eyes go wide. That’s not “leveraged for growth.” That’s “walking a financial tightrope.” Every percentage point that refinancing costs rise, EVgo’s burn rate accelerates. Every quarter that profitability remains elusive is another quarter of dilution risk or debt restructuring conversations.

The Momentum Play That Isn’t

Foxy notes “positive momentum (7.9% in 20d) signals institutional accumulation.” Maurice wants to gently point out that bounces happen on terrible stocks all the time. A 7.9% bounce off a 52-week low isn’t institutional conviction—it’s a dead cat that briefly remembered how to bounce. The short ratio of 8.6 is eye-watering high, meaning a ton of investors are betting against EVgo. When a shorted stock bounces, shorts cover. That’s not accumulation. That’s pain relief.

The company has 8 analysts covering it. Most are rating it “buy.” But analyst sentiment on unprofitable infrastructure plays is about as reliable as a banana peel for traction. They’re extrapolating the tailwind (federal mandates, fleet electrification) without accounting for the capital requirements or the competitive intensity. Foxy sees a 3-5 year path to scale. Wall Street sees a “clean energy story.” What they’re both not seeing clearly is the profitability question mark that grows bigger every quarter.

The Real Problem Nobody’s Talking About

EVgo isn’t in a vacuum. Competitors include Electrify America (backed by VW, essentially unlimited capital), Tesla’s Supercharger network (which is now opening to other manufacturers and has a massive head start), and ChargePoint, which is also public and also burning cash but at least has different infrastructure relationships. The competitive moat isn’t wide. The market isn’t proven. The winner-takes-all dynamics are real, and EVgo isn’t guaranteed to be the winner.

What worries Maurice most: the business model assumes that charging margins improve dramatically as utilization goes up. That makes sense theoretically. But it assumes demand is actually there. It assumes pricing power. It assumes that consumers will choose your charging network over competitors. With a beta of 2.8, this stock swings wildly with sentiment. When EV enthusiasm wanes—and sentiment does wane—EVgo swings down with it.

The Case for Optimism (But With Caveats)

Okay, Maurice isn’t going to pretend the bull case doesn’t exist. It does. Federal mandates are real. The EV transition is real. Fleet electrification is accelerating. In 3-5 years, if EVgo achieves scale and actually flips to profitability, a stock trading at $1.89 could absolutely double or triple. Foxy’s $5.50 target isn’t crazy if execution happens and capital costs stabilize.

But and this is a massive but—that requires: (1) continued capital access at reasonable rates, (2) meaningful path to profitability, (3) competitive success, and (4) demand persistence. None of those are guaranteed. Some are genuinely questionable.

The Honest Breakdown

The revenue growth is real and impressive. The tailwind is real. But EVgo is asking investors to believe in a multi-year story where the company will eventually stop burning cash. They’re trading at depressed prices, yes. But those prices might be depressed for a reason. The market’s doubt might be rational, not irrational.

Maurice sees why Foxy likes this. But Maurice also sees why most of Wall Street is cautiously pessimistic despite their buy ratings. Analysts hedge by pricing in massive upside (the $5.50 target from UBS) while simultaneously acknowledging the cash-burn reality. That’s not confidence. That’s hope.

For aggressive growth investors who can stomach serious volatility and believe the EV charging thesis deeply? EVgo at $1.89 has lottery-ticket appeal. But Maurice must be clear: this isn’t a no-brainer value play. This is a high-risk, high-reward bet on a company that hasn’t yet proven it can build a profitable business at scale. The entry price is attractive because the risk is real.

*Disclaimer: Trained Market Monkey, Maurice, and our entire primate analysis team provide entertaining market commentary only. While Maurice’s Monkey Momentum Index™ and banana-based technical analysis have shown mysterious accuracy, they should never be considered financial advice. All investment decisions should be made in consultation with qualified financial professionals, not monkeys—no matter how impressive their fruit-throwing abilities may be. For real financial advice, please consult your financial advisor, who probably doesn’t accept bananas as payment.*

Coming next week: Maurice investigates whether “growth-at-any-cost” tech stocks are finally learning to count their bananas before they multiply.

Maurice’s final wisdom: Sometimes the best investments aren’t the ones with the prettiest growth charts—they’re the ones where profitability actually exists. Judge accordingly.