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One of the most promising aviation companies out there intends to drastically commercialize air taxis. As things stand, Joby Aviation, Inc. (NYSE: JOBY) is set to start commercial passenger operations in 2025, which is significant since its JAS 4-1 eVTOL air taxi could become the first FAA-approved electric vertical takeoff and landing (eVTOL) aircraft for commercial use. Additionally, JOBY’s entrance into the aviation industry may cause widespread reverberations due to its unique business model. With connections to some major global players and military contracts, JOBY stock could be a worthy long-term investment.
JOBY Stock News
On June 28, JOBY was given the green light to start flight testing its JAS4-1 eVTOL air taxi, and in response, JOBY stock ran by as much as 87%. This approval is extremely promising since it reaffirms JOBY’s 2025 FAA approval target. Having said that, other heavy hitters in the industry are experiencing setbacks in the approval process which provides JOBY with a major advantage.
Vertical Aerospace Ltd. (NYSE: EVTL) recently delayed its entry to service from 2025 to 2026 and Lilium N.V. (NASDAQ: LILM) pushed back its entry to service from 2024 to 2025. When it comes to its US competitors this FAA approval discrepancy is even more apparent. A prime example of this is Archer (NASDAQ: ARCH) which is set to start test flights in 2024. Given this information, there is a very real possibility that JOBY’s JAS 4-1 might become the first FAA-approved eVTOL for commercial use which could make JOBY a pioneer of commercial aviation.
The Commercialization Of Air Taxis
As is, eVTOL manufacturers make revenue through B2B purchases of their eVTOLs. That said, JOBY’s business model upends this common industry norm by providing services directly to clients through a rideshare app model. In a sense, JOBY’s business model is closer to Uber’s (NYSE: UBER) than it is to its other industry compatriots. This model provides easier accessibility to the air taxi service which may lead to substantial revenue. Moreover, if this veering trajectory presents favorable results then other players might emulate JOBY.
Short trips in mega cities like New York, and Los Angeles are exceptionally high. As a matter of fact, 99.4% of trips in New York and 99.1% of all trips in Los Angeles are less than 50 miles. These trips are often hampered by traffic congestion and other forms of delay. JOBY’s air taxi rideshare business model basically provides a solution to these inconveniences by providing a faster mode of transportation devoid of traffic complications.
In order to fulfill its goals, JOBY has partnered up with UBER and Delta Air Lines, Inc. (NYSE: DAL). Through its DAL partnership, JOBY is permitted to use DAL’s New York and Los Angeles facilities in exchange for JOBY providing DAL clients with a differentiated service. The icing on top of the DAL partnership deal is a $60 million equity investment that might be followed by a further $200 million as JOBY achieves its milestones.
On the other hand, the UBER deal will allow clients to book JOBY flights via the UBER app, which may result in widespread accessibility to JOBY’s air taxi service. These developments are a foundation of greater commercialization efforts that may drastically alter aviation industry norms.
Toyota Motor Corporation (NYSE: TM) is JOBY’s current majority shareholder as it has invested $400 million in the company so far. That said, Tetsuo Ogawa Toyota North America’s CEO was recently appointed as a member of JOBY’s board. This move is a strong indicator that Toyota and JOBY are seeking to strengthen their partnership. Tetsuo Ogawa’s appointment may very well be a prelude to more funding and other means of assistance. It is for that reason that JOBY’s investors should keep their eyes peeled on the news in search of further developments regarding Toyota.
JOBY’s relationship with the US military dates back to 2020 when the Air Force granted its unmanned electric aircraft an airworthiness certification that would allow the DoD to utilize it. As a result, the DoD has provided JOBY with multiple multi-million dollar contracts, the most recent of which was in April 2023 and was worth $55 million. This product revenue stream provides JOBY with cash during its pre-commercialization period.
The Benefits Of Notoriety
Recently, JOBY obtained a $100 million investment from SKtelecom as part of a partnership that will help JOBY enter the Korean market. This deal may be the first of many to come as a result of JOBY’s growing notoriety. JOBY’s grand air taxi commercialization vision caught the eye of TM, DAL, UBER, and the DoD. These deals, contracts, and partnerships add an air of authenticity to JOBY which in turn caused its notoriety to skyrocket. Given JOBY’s current notoriety, other companies may seek out a partnership which could cause JOBY stock to surge in response.
JOBY Stock Financials
According to JOBY stock’s Q1 2023 report its assets decreased QoQ from $1.29 billion to $1.21 billion. Meanwhile, its cash balance starkly decreased from $146 million to $49 million. On the other hand, liabilities increased from $128 million to $149 million.
In terms of operating expenses, JOBY experienced an increase YoY from $94.3 million to $99.7 million which in turn caused its net loss to increase from $62.3 million to $133.3 million.
@JSpitTrades is bullish on JOBY stock.
@StockSavvyShay providing a comparative analysis between ARCH and JOBY stock.
JOBY stock is in a neutral trend and is trading in a sideways channel between $9.11, and $11.01. Looking at the indicators, the stock is currently above the 200, 50, and 21 MAs which are bullish indications. Meanwhile, the RSI is neutral at 59 and the MACD is bearish.
As for the fundamentals, JOBY recently witnessed 2 catalysts in receiving the green light to start flight testing and the $100 million investment from SKTelecom to enter the Korean market. Given the company’s potential and its several connections with major players, JOBY stock could be an attractive long-term investment, however, investors could wait for the stock to cool down from its recent run before going long as there are 2 gaps near $6.43 and $9.11 that could be filled soon.
JOBY Stock Forecast
JOBY stock could be considered a worthy long-term investment due to its litany of possible catalysts and its potential. These catalysts include but are not limited to DAL contractual milestones, FAA approval, and additional partnerships. As is, a flock of noteworthy global players partnered with JOBY and seem eager to invest in the company due to its unprecedented potential to further commercialize the aviation industry. It is for that reason that JOBY should be on everyone’s radar.
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