Joby Aviation Soars Towards Commercial Flight with New Developments
Joby Aviation (JOBY) is making impressive strides in the field of electric vertical takeoff and landing (eVTOL) aircraft, achieving important advancements and gaining regulatory approval. The FAA has authorized ElevateOS, a software solution that optimizes pilot operations and schedule management while also offering an advanced rider app. Additionally, Joby has tested a hydrogen-electric air taxi and welcomed Xwing’s autonomy division into its team.
Focused on global market expansion, Joby sets its sights on countries like Australia and the UAE. Backed by a significant financial commitment from Toyota (TM), the company is well-prepared for ongoing growth in the air mobility sector, positioning itself as an attractive option for future-oriented investors.
Progress on Multiple Levels
Joby Aviation, focused on air transportation, is in the process of developing its eVTOL aircraft. Currently, the company is testing four aircraft and expects to make substantial progress toward the fourth (of five) stage of certification in the coming months.
Recently, Joby completed a notable 561-mile test flight with its hydrogen-electric air taxi. It has also boosted its autonomous technology capabilities through the acquisition of Xwing’s autonomy division. On an international scale, Joby has sought certification in Australia and is collaborating with Saudi Arabia’s Mukamalah to introduce its aircraft there.
In a significant move, the Federal Aviation Administration (FAA) announced new regulations that pave the way for Joby to launch commercial passenger services in the U.S. once aircraft certification is achieved. The company is also advancing its efforts in the UAE, taking critical steps towards becoming a certified air taxi operator. This initiative complements Joby’s agreement with Dubai’s Road and Transport Authority to initiate air taxi services, further bolstered by a Memorandum of Understanding with other UAE departments.
Moreover, Joby has secured an additional commitment from Toyota for a substantial investment of $500 million, which will accelerate the certification and commercialization processes for its aircraft.
Q2 Financial Performance Overview
In its Q2 financial report, Joby outperformed expectations, with total operating expenses roughly $2 million lower than in the first quarter. Increased staffing and spending were offset by higher government contract deliverables, leading to a reduction in overall expenses.
However, Joby recorded a net loss of $123 million for the quarter, primarily caused by an operating loss of approximately $144 million. This was somewhat mitigated by $21 million in interest and other income. The net loss expanded by $29 million compared to the previous quarter due to an unfavorable revaluation of the company’s warrants and earn-out shares. Earnings per share (EPS) remained in line with analysts’ expectations at -$0.18.
At the end of the quarter, Joby reported $175 million in cash and cash equivalents, bolstered by short-term investments bringing the total to a healthy $825 million. The company is on track to meet its 2024 cash expenditure forecast of $440-470 million.
Stock Performance and Predictions
Joby’s stock has displayed considerable volatility with a beta of 2.49, and it has seen a 31% loss over the past three years. Currently, it is trading near the upper end of its 52-week range of $4.50–$7.69, showing positive momentum as it sits above both its 20-day ($5.49) and 50-day ($5.40) moving averages.
Analyst opinions on JOBY stock are varied. H.C. Wainwright’s Amit Dayal recently initiated coverage with a Buy rating and a price target of $9, suggesting Joby could start initial commercial operations by 2025. Conversely, Deutsche Bank’s Edison Yu issued a Sell rating, assigning a price target of $4.00, citing significant capital requirements and potential funding challenges.
Overall, Joby Aviation holds a Moderate Buy rating based on six recent analyst recommendations, with an average price target of $8.70, indicating a potential upside of 68.60% from current price levels.
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The Final Takeaway on JOBY
Joby Aviation is advancing its eVTOL aircraft development and has received FAA approval for its ElevateOS software. The successful test of a hydrogen-electric air taxi strengthens its technological position. With its ambitious plans for international expansion and substantial backing from Toyota, Joby is positioning itself well for future commercial operations expected to start in 2025. This combination of innovation and a strong market outlook makes Joby Aviation an appealing choice for investors eager to be part of the evolving air transport industry.
Disclosure
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
