Shares of Joby Aviation (NYSE:JOBY) — a company specializing in electric vertical takeoff and landing (eVTOL) aircraft manufacturing — moved only slightly on Thursday. However, it’s been one of the top performers so far this year, with JOBY stock gaining about 83%. Nevertheless, investors will probably need to see tangible evidence of forward progress.
Therefore, Joby’s upcoming third quarter of 2023 earnings report will be of great significance for stakeholders. Yesterday, management announced that the all-electric aircraft developer expects to release the aforementioned disclosure on Nov. 1 following the closing bell.
In Q2, Joby reported $1.2 billion in cash and short-term investments. It also reported net losses of $286 million, including operating expenses of $116 million, along with $181 million lost to revaluation of liabilities, per Airport Technology. Further, its adjusted EBITDA loss came in at $83 million. Notably, Joby is a pre-revenue enterprise.
However, on the positive front, Joby took an important step toward full-scale production. Earlier in the year, the company rolled out and launched the first flight of its prototype eVTOL craft. As a narrative play, investors will fundamentally want to see strong progress to justify the robust rally of JOBY stock.
JOBY Stock Must Overcome Rising Credibility Concerns
Looking ahead to the Q3 report, investors of JOBY stock have reason to be encouraged. Beyond the performance of shares this year, the underlying company effectively enjoys a first-mover advantage. That could go a long way in a rapidly contested arena.
Another catalyst that potentially benefits JOBY stock for the long haul is its partnership with automotive giant Toyota (NYSE:TM). Earlier this year, Joby and Toyota expanded their relationship with a long-term supply agreement for key powertrain and actuation components. Nevertheless, some serious credibility concerns remain that investors won’t be able to ignore indefinitely.
As InvestorPlace markets analyst Thomas Yeung pointed out, being the first mover hasn’t always panned out for JOBY stock. Since making its public market debut in 2020, Joby has suffered a substantial loss in its market capitalization. It has also missed key milestones, pushing back certain event launch dates.
Moreover, Joby still faces challenges with acquiring approvals from the Federal Aviation Administration (FAA). As other experts have noted, Joby only received approvals for its paperwork, not for real-world testing or verification.
Given the cash burn and lack of revenue generation from grants and partnerships, Yeung states that the financial clock is ticking. In other words, investors must see more meat on the table.
Why It Matters
Currently, analysts rate JOBY stock as a consensus moderate buy. Experts from Canaccord Genuity and Cantor Fitzgerald anticipate that shares will hit $11 and $10, respectively. Overall, the average target of $10.50 implies 67% upside potential.
On the date of publication, Josh Enomoto 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.
