EVgo stock price has crashed hard in the past few months, erasing some of the gains made in the fourth quarter. After soaring to a high of $9.07 on October 25 last year, it has plunged by 60% to the current $3.57. It has moved to its lowest level since August. So, is the EVgo a good stock to buy as it forms a death cross?
Why EVgo share price has crashed
EVgo stock price has crashed after Donald Trump won the election, a move that could affect investments in the EV charging industry. Under Biden, the Inflation Reduction Act (IRA) allocated billions of dollars to expand and improve the charging industry, a move that benefited the company. It received a $1.05 billion conditional loan from the Department of Energy (DoE).
The stock has also crashed because of the recent fires in Los Angeles, where the company has hundreds of stations. These fires have likely destroyed many of its stations and incinerated many electric vehicles.
Still, EVgo has some of the best fundamentals and is seeing substantial growth, helped by more deployments and its partnership with General Motors.
The company’s most recent financial results showed a record $67.5 million in revenue, a 92% increase from last year. Most of this revenue came from the charging network business, which brought in $43.1 million.
This revenue growth happened as the company’s network throughput increased from 37 GWh to 78 GWh. The firm anticipates that its network will more than double in the next few years as demand for charging infrastructure grows.
EVgo has some of the best fundamentals in the EV charging companies in the US. It is growing faster than other companies like ChargePoint and Blink Energy. Analysts anticipate that its annual revenue for 2024 was $258 million, a 60% annual growth. It will get to $361.5 million this year, and $500 million next year.
On the other hand, ChargePoint’s 2024 revenue will be $415 million, a 17% annual decline from a year earlier. Blink Charging’s revenue was $126.8 million, a 9.8% annual decline in 2024 and analysts expect that it will get to $158 million this year.
Read more: EVgo stock price analysis: risk/reward is very attractive
EVgo stock price forms a death cross
EVgo stock chart by TradingView
The daily chart shows that the EVgo share price peaked at $9.07 in October and fell to $3.50 today. Most recently, it dropped below the key support level at $4.75, its lowest level in November last year.
The stock has formed a death cross pattern as the 50-day and 200-day Exponential Moving Averages (EMA). This is a popular pattern that often leads to a strong bearish breakout. It has also lost below the key support level at $3.82, its highest swing in December 2023.
Therefore, technically, the stock will likely continue falling as sellers target the next key support level at $1.68, its lowest swing in April 2024. This price is about 53% below the current level.
However, this drop may be a good opportunity to buy the stock because of its growing market share in the EV charging industry. A move above the key resistance point at $4.75 will invalidate the bearish view.
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