Why JOBY Stock Could Have More Room to Fly Higher

Stocks to buy

Joby Aviation (NYSE:JOBY) offers a unique and intriguing investment opportunity for long-term investors looking at sectors with high growth potential. The world of eVTOL (electric vertical takeoff and landing) aircraft manufacturing is one that’s still in its infancy. However, as we’ve seen with so many high-growth spaces, the time to invest in a given technology is usually when it’s getting off the ground (so to speak).

The choice of Dayton, Ohio, for Joby’s eVTOL factory is noteworthy, as is the company’s collaboration with Toyota (NYSE:TM). This facility is expected to initially manufacture only 500 eVTOLs annually. However, it should grow significantly to mass production in short order. Accordingly, recruitment efforts for the new factory reinforce the company’s expansion strategy.

With its continuous milestone achievements and strategic partnerships, Joby Aviation is well-positioned to dominate the skies in the next five years.

Strong Q3 Earnings Report

Joby Aviation achieved a nearly breakeven quarter in the company’s third quarter as it progressed toward its goal of launching commercial air taxi operations by 2025. In its Nov. 1 earnings call, the Santa Cruz-based startup reported earnings of $1.5 million for the quarter, a significant improvement from the $79 million loss in the same period the previous year.

In the quarter, Joby reported $116 million from gains back on subsidiary liabilities and $13.6 million from interest income. Joby allocated $101 million for research and development in their eVTOL certification pursuit. Despite a $398 million loss in the first nine months of 2023, Joby retains a robust balance sheet, offering a competitive edge in pioneering a new aircraft class.

As of Sept. 30, Joby held around $1.1 billion in cash and short-term investments, similar to the previous year. In the third quarter, the company initiated a pilot-involved flight-testing program, covering various maneuvers, including hovering, tracking runways and executing precise circles.

In the same quarter, Joby announced a manufacturing facility in Dayton, Ohio, backed by up to $325 million in incentives. The 140-acre site at Dayton International Airport can produce 500 aircraft yearly and expand to 2 million square feet. Joby’s civilian aircraft carries four passengers over 87nm at 174kt.

FAA Stage 3 Is at 84%

Joby, an air taxi developer, reported significant progress, completing 84% of its Stage Three FAA certification work. This update came with the release of Joby’s Q3 2023 results, discussed further by CEO JoeBen Bevirt. The FAA approved 84% of Joby’s Stage Three proposals, meaning we could see Joby’s vehicles in the skies on, or even before, its expected launch date.

Joby has made substantial progress in the FAA Type Certification process, completing a crucial stage that focuses on essential systems. Although there are five phases in total, this achievement is a significant step toward certification. CEO JoeBen Bevirt expressed optimism and noted they are moving swiftly to work on Stage Four.

Joby highlighted several recent achievements, including delivering a test AAM aircraft to the U.S. Air Force, conducting its first piloted test flights of an electric air taxi, and maintaining a substantial $1.1 billion in cash and short-term investments to support its goals of FAA certification and passenger service launch in 2025.

I’m Still Bullish on JOBY Stock

Joby also has strategic alliances with significant entities, such as the U.S. Air Force and NASA via the AFWERX program, that play a crucial role in advancing eVTOL integration into national airspace, benefiting the entire air taxi industry. The $131 million contract with the U.S. Air Force underscores market confidence in Joby’s capabilities.

Coupled with supportive legislation like SB 800 in California, these elements position Joby as an eVTOL market leader, offering a lucrative investment opportunity. I think that this speculative company with a very uncertain future is among the most intriguing bets in the high-growth world of equities 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.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.

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