Joby Aviation (NYSE:JOBY), a leader in eVTOL technology, aims to commence commercial passenger operations by 2025. The company’s FAA certification and collaboration with NASA for acoustic impact analysis demonstrate its space exploration connection.
Joby Aviation is not just about flying cars; it’s also a space stock with significant potential.
Joby Aviation’s partnership with Delta Air Lines (NYSE:DAL) aims to revolutionize urban transportation. However, JOBY stock recently faced short-term challenges, reporting a Q2 loss of $286 million, mainly due to higher costs and reduced income.
Despite these losses, the company maintains a strong financial position with nearly $1.2 billion in cash and short-term investments.
Here’s a look at the bull and bear case for Joby stock:
The Bull Case
Investors in Joby Aviation have primarily focused on its long-term potential, considering that revenues and earnings will take time.
A noteworthy catalyst is Joby’s CEO predicting that flying taxis may become mainstream in major cities, with hundreds or thousands operational by 2025. This insight could impact JOBY stock.
In August, Joby Aviation shared operational updates in a shareholder letter and achieved a milestone with the first liquid hydrogen-powered electric aircraft flight.
When considering eVTOL aircraft investments in 2023, Joby Aviation stands out as a top choice. The company consistently advances in the flying taxi sector and has plans for a significant production facility in Dayton, Ohio capable of producing up to 500 aircraft annually.
The Bear Case
Kerrisdale Capital has gone short on Joby Aviation, citing profitability concerns. This caused a 5% dip in the electric aircraft maker’s shares. Joby responded, claiming Kerrisdale aims to drive down its share price.
Joby intends to operate as a rideshare service, setting it apart from eVTOL competitors selling to airlines and logistics companies. Joby recently received approval to test its electric air taxi. Kerrisdale highlights concerns about higher operating costs due to potentially lower range and power compared to helicopters.
The company has already reported a larger-than-expected loss in its latest quarter due to certification and early manufacturing expenses.
What Now
Joby’s expansion plans include a manufacturing facility in Dayton, Ohio, designed to produce up to 500 aircraft yearly. The investment is expected to reach $500 million, generating around 2,000 jobs.
That said, I think there’s still amplified risk for investors looking to buy JOBY stock here. Thus, it may be advisable to await its final certification before committing to JOBY stock. (Joby has already conducted prototype aircraft tests, which included essential day-to-day pilot functions, aiding its certification process.)
That said, long-term investors betting on flying taxis could certainly find the company intriguing, hence the bull-bear debate on this one.
On the date of publication, Chris MacDonald 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.
