Joby Aviation (NYSE:JOBY) stock, a lesser-known but potentially significant aviation stock, operates in the emerging air mobility sector.
Despite a strong year-to-date surge, JOBY stock’s potential could remain high due to the early-stage market. Based in California, Joby Aviation specializes in electric vertical takeoff and landing aircraft. Backed by major financial supporters, holding a modest JOBY position might yield gains, yet caution and prudent risk management are advised.
A Perspective on JOBY Stock
Joby Aviation’s Q2 shareholder letter didn’t focus on sales or income because of its lack of profitability. This could concern value-focused investors. JPMorgan analysts downgraded JOBY stock, noting its doubled year-to-date value might be overblown.
It’s crucial not to over-invest in an emerging industry with inherent risks.
However, Joby Aviation’s financial position is strengthening. Its cash and equivalents increased from $146.101M to $382.673M between December 2022 and June 2023. Capital injections from backers like Baillie Gifford ($180M) and SK Telecom ($100M) contributed to the improved balance sheet.
JOBY Will Make History
Joby Aviation has the potential for significant recognition, possibly making history, as it expects delivering the first-ever eVTOL aircraft to a customer. This milestone is projected for the coming year, with plans to relocate the prototype to Edwards Air Force Base under its U.S. Air Force contract.
Joby Aviation is poised to create history and substantial revenue through its contract valued at up to $131 million. Certification plans for its aircraft have been submitted to the FAA, aligning with the agency’s projection of urban air taxi service starting by 2028.
The journey ahead may be long, requiring investor patience and confidence in Joby’s progress.
Following the FAA’s approval for Special Airworthiness Certification, Joby is cleared for testing passenger-less prototypes of its production model. This is a significant achievement, but rival Vertical Aerospace also received similar approval in 2021.
However, Vertical recently delayed its commercial timeline to 2026, reflecting a trend in the industry’s timeline adjustments.
What Now
In its Q1 earnings report, Joby highlighted substantial support from government in the Advanced Air Mobility sector. As part of a U.S. Air Force contract, two aircraft will move to Edwards Air Force Base in 2024.
The company aims to deliver its first eVTOL to a customer in the same year as well. Joby completed stages 1 and 2 of the certification process.
Consider the growth potential and risks of Joby Aviation. Commercialization may take time, and recent stock rallies could pause. However, risk-tolerant investors might want to consider JOBY stock for substantial gains over the long-term.
This is a stock that will require tremendous patience to hold (and could decline much further from here if we head into a recession). But it’s an intriguing speculative option on my watch list right now.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.