Joby Aviation (NYSE:JOBY) is a business that most people haven’t heard about, but it could become a famous name someday. Since the air mobility market is still in its infancy, JOBY stock could run much higher even after a powerful year-to-date rally.
Headquartered in California, Joby Aviation builds electric vertical takeoff and landing (eVTOL) aircraft. As we’ll discover, the company has some confident large-scale financial backers. Just maybe, a small share position in Joby Aviation today could achieve liftoff soon — but be aware of the risks and don’t over-leverage yourself.
An Objection to JOBY Stock
Since Joby Aviation isn’t profitable, the company didn’t spend much time discussing sales or income in its second-quarter shareholder letter. This might be off-putting to value-focused investors. Furthermore, it might bother some commentators that Joby Aviation shares have doubled in value year-to-date.
Thus, JPMorgan analysts reportedly downgraded JOBY stock from “neutral” to “underweight,” citing a “largely overblown rally” in the shares. That’s a fair point, and since there’s risk involved in emerging industries, financial traders shouldn’t over-invest in Joby Aviation.
It’s worth noting, though, that Joby Aviation’s capital position seems to be improving. Specifically, the company’s balance of cash and cash equivalents more than doubled from $146.101 million as of Dec. 31, 2022, to $382.673 million as of June 30, 2023.
Certainly, Joby Aviation’s balance sheet has been bolstered by capital infusions from confident backers. These include an investment led by financial firm Baillie Gifford totaling $180 million as well as a $100 million investment from telecommunications company SK Telecom (NYSE:SKM).
Joby Aviation’s Big Contract and History-Making Moment
Like I said earlier, Joby Aviation could be famous someday. The company might even be in the history books. That’s because Joby Aviation’s production prototype aircraft is, according to the company, “expected to become the first-ever eVTOL delivered to a customer.”
This event could happen as soon as next year. Joby Aviation plans to move its prototype aircraft to Edwards Air Force Base to be operated by the company as part of its Agility Prime contract with the U.S. Air Force.
Hence, Joby Aviation is preparing to make history while also generating big-time revenue, as the contract is valued at up to $131 million. Moreover, Joby Aviation has already submitted all of its certification plans to the Federal Aviation Administration (FAA).
According to the FAA’s timeline, urban air taxis could commence service over U.S. cities as early as 2028. Clearly, the path forward will be challenging for Joby Aviation. New milestones could take months or years. That’s why JOBY stock investors will need to be patient and have faith in the company.
JOBY Stock: Keep Your Position Size Small
Hopefully, you’re now aware of the risks and the potential growth of Joby Aviation. It might take a while for Joby Aviation to fully commercialize its aircraft.
Also, JOBY stock recently rallied, so it might pause or waver before taking the next leg up. Still, risk-tolerant investors should consider taking a share position in Joby Aviation. There’s multi-bagger potential here if you’re willing to give the company time to reach its next milestones.
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.
