Germany-based Lilium NV (NASDAQ:LILM) offers an interesting way to avoid the traffic on the roadways. If you see a future for the air-mobility market, then you might want to consider LILM stock.
Founded in 2015, Lilium seeks to build a “transport network and service for people and goods.” In plain English, it’s an airplane-taxi company.
LILM stock just started trading not long ago. As a result, it hasn’t gotten much coverage from Wall Street analysts yet.
However, one analyst recently assigned an ambitious $17 price target to the stock. That’s certainly encouraging – but there may be a better way to stake your claim in the short-trip aircraft market.
A Closer Look at LILM Stock
As InvestorPlace contributor Samuel O’Brient reported, Lilium made its public debut on Sept. 15 via a special purpose acquisition company (SPAC) merger. And the company that helped get Lilium to the Nasdaq Exchange used to be Qell Acquisition.
Prior to the merger, Qell Acquisition traded under the ticker symbol QELL. This stock stayed close to the $10 area, as SPAC stocks often do. So there isn’t much price history to speak of here, but so far, the transition to LILM stock hasn’t produced life-changing gains. As of Sept. 27, the stock made a soft landing at $10.60, leaving eager investors to wonder when the big liftoff will happen.
It’s still early in the game, so the shareholders shouldn’t just abandon ship at this stage. Lilium looks promising. But again, there might be something even better out there, flying under the radar.
Lilium Is Not for Everyone
Upon the closing of the Qell-Lilium merger transaction, Lilium Board Chairman declared that “Shareholders, management and more than 700 employees are united in their quest for sustainable aviation for everybody.”
Not too shabby, I must admit. What about the aircraft itself, though?
Lilium’s crown jewel is the company’s seven-seater Lilium Jet, an all-electric vertical take-off and landing jet that offers “leading” capacity (though I wasn’t able to find substantiation of this claim), low noise and high performance—with zero operating emissions. Lilium also boasts about its jets having a cruise speed of 175 miles per hour.
So far, so good. Right?
As far as airworthiness goes, Lilium first applied for a Type-Certificate in 2017 through the European Aviation Safety Agency (EASA) and requested (Federal Aviation Administration) FAA validation “as early as 2018” and has been “working hand in hand with both authorities ever since.”
This was all enough for Piper Sandler analyst Alexander Potter. In fact, Potter seems fairly impressed with the company. He assigned LILM stock a “buy” rating and a $17 price target—though he admitted, “This type of investment isn’t for everyone.”
Investors Might Get More Speed from First Mover JOBY
Potter might be right about that. While it’s true that “Lilium’s technology is well-suited to regional trips of about 100 miles,” Potter had to concede that the company “won’t generate revenue for another few years, and more capital will almost certainly be required.”
The Piper Sandler analyst concluded that “Volatility seems likely” when it comes to LILM stock.
With that in mind, I’d like to suggest California-based electric aircraft maker Joby Aviation Inc (NYSE:JOBY) as an alternative.
Let’s look at a side-by-side comparison.
First, Joby’s aircraft offer a top speed of 200 miles per hour, beating Lilium’s 175 miles per hour.
Next, Lilium’s “more than 700 employees” don’t quite measure up to Joby’s “team of 800+ with deep aerospace, software, and electrical engineering experience” and “1000+ combined years of certification experience.”
As far as the commercial launch dates go, Lilium is aiming for 2024, and so is Joby. Therefore, it’s a wash in that regard.
And by the way, Joby has also picked up a favorable Wall Street rating. Specifically, Morgan Stanley analyst Kristine Liwag sees upside as high as $60 per share for JOBY stock, and assigned it a price target of $16 on Sept. 23. JOBY currently trades around $10.
Liwag also assigned a “buy” rating to the stock, while declaring that the “sky’s the limit.”
The Bottom Line on LILM Stock
Don’t get the wrong impression. Joby Aviation appears to be a promising company in an exciting, emerging industry. But there’s more than one way to wager on the growth of the flying-taxi market.
So, feel free to conduct your due diligence on both Lilium and Joby Aviation. As you’ll probably find, Lilium’s good, but not the best.
On the date of publication, David Moadel 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.
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.