Flying car stocks have become the latest investing trend. In other words, we could finally be living out our Jetsons fantasies in the near future. Although many models are prototypical, some companies have built working models that are enjoyed by enthusiasts who like the cutting edge of transportation technology.
Flying car stocks could be a valuable investment for another reason. Since the technology is new and not well understood, the market may not be pricing in the potential of these companies as efficiently as others. Most retail investors are focused on trends like EVs and hydrogen cars, and might not be fully dialed into the growth potential of flying car stocks.
Although these companies are indeed speculative, investing in these companies may fill a hole in your portfolio as well as expose you to revolutionary technologies. Read on for the best flying car stocks to buy.
Joby Aviation (JOBY)
Joby Aviation (NYSE:JOBY) has been a frontrunner in the electric vertical takeoff and landing (eVTOL) space. With over $700 million in funding and partnerships, the company has both the financial backing and the strategic alliances to succeed.
The company recently reported a Q2 loss of $286 million, a significant increase from last year’s $49 million loss. This was due mainly to higher operational costs in aircraft development and certification. Despite the losses, the company remains financially robust. It boasts nearly $1.2 billion in cash and short-term investments, bolstered by recent investments from institutional banks.
It’s not unusual for growth stocks like JOBY to burn through cash while they grow their market share. Its cash burn rate is also manageable, without short-term liquidity risks. For this reason, JOBY might be one of those flying car stocks to buy.
Lilium (LILM)
Lilium’s (NASDAQ:LILM) unique jet-powered eVTOL design sets it apart from competitors. The company aims to offer regional air mobility services, filling a gap between short intra-city trips and longer airline flights. This could open up an entirely new market segment, providing a first-mover advantage.
In Q2 2023, LILM stock secured a $192 million capital raise and received key certifications, making it the only eVTOL manufacturer with dual certification. The company also entered the Chinese market through partnerships and has remained on track for its first manned flight in late 2024.
The investment into LILM and JOBY shows that institutional investors are taking notice of flying car stocks. For retail growth investors, it’s important to go where the money is flowing. These institutions are ultimately responsible for the growth and decline of the stock prices of small and large firms. Even if you disagree with the the direction these institutions are taking, they still might be right. They have the ability to advise other influential firms to put money into these industries. In a way, their recommendations and investments become self-fulfilling prophecies.
LILM and flying car stocks therefore have great backing behind them, which makes them opportune investments.
EHang Holdings (EH)
EHang (NASDAQ:EH) is a Chinese company specializing in autonomous aerial vehicles and has already conducted thousands of test flights. The company is targeting both passenger and cargo transport, diversifying its revenue streams.
In Q2 2023, EHang’s revenue dropped to $1.4M from $3.1M in Q1 due to delayed deliveries but maintained a high gross margin of 60.2%. Despite operating and net losses, the company secured a $23M investment, boosting its cash reserves. EHang completed key certification tests for its EH216-S UAV, delivered 5 units to a tourism JV. They have also inked a strategic partnership for urban air mobility with Shenzhen Bao’an District.
EH stock might fill a hole in your portfolio if you are after a flying car stock as well as invest in emerging markets, notably in China. These factors combined help make it one of those companies you can’t afford to miss out on.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
