Electric vertical takeoff and landing (eVTOL) aircraft manufacturer Joby Aviation (NYSE:JOBY) gained altitude recently after obtaining a new certification from the Federal Aviation Administration (FAA). It moves the eVTOL leader one step closer to its goal of commercializing its business next year.
Although it is helping to create an entirely new industry from the ground up, Wall Street remains upbeat about its prospects for a successful launch. As it could be the first eVTOL company to get FAA approval to fly commercially, Joby Aviation stock could soar even higher.
Cantor Fitzgerald analyst Andres Sheppard certainly thinks so because JOBY has made significant advances in testing its aircraft. And, since the FAA issued important key certifications that lets it maneuver its way through the regulatory labyrinth, Sheppard is confident of Joby Aviation’s eventual success.
That should ultimately allow the eVTOL leader to capitalize on the potential growth of the sustainable air travel market. According to analysts at Markets and Markets, the global electric aircraft market is expected to grow at a compound annual growth rate (CAGR) of 19.8% through 2030, hitting $37.2 billion.
As Joby Aviation is the frontrunner in the space, it will capture a large share of the market before other players leave the hangar.
Sheppard has a market-high target price on Joby Aviation stock of $10 per share. Recently, he reiterated his bullish outlook with a “buy” rating on the stock.
Ready for Takeoff
Two years ago, Joby Aviation received its Part 135 Air Carrier & Operator Certificate from the FAA. That is a critical advance in its goal for launching its business in 2025. It means JOBY can operate aircraft commercially to refine its systems and procedures for launching its air taxi service next year.
Importantly, FAA certification is a five-step process, so Joby Aviation now has the end goal in sight. The final threshold to cross will be receiving Type Certification, which is the regulator’s green light for commercialization.
It puts the firm a step ahead of rival Archer Aviation (NYSE:ACHR), which is also soaring on gaining additional certifications from the FAA. Its Midnight aircraft recently achieved its first transition flight. That occurs when an aircraft takes off vertically like a helicopter, accelerates forward as its propellers tilt forward to propel it ahead like an airplane and then lands vertically again like a helicopter. The craft was able to reach speeds of more than 100 mph.
Joby Aviation Stock: The Wind Beneath Its Wings
Analyst Sheppard’s $10 per share price target implies 61% upside potential in Joby Aviation stock. At the time the Cantor Fitzgerald senior analyst reiterated his buy rating, JOBY had been trading at around $6.50 per share, slightly higher than its current $6.29 share price.
Overall, Wall Street has a consensus price target of $8 per share on Joby Aviation stock, suggesting gains of 30% are possible. JPMorgan Chase raised its price target to $6 from $5 per share but has a hold rating.
Joby Aviation and the other eVTOL players represent an opportunity for investors to be present at the birth of an industry. It is not often they are given such a chance, certainly not within a large, mature sector like aviation.
As JOBY maps out a plan for a regional air mobility service with hybrid planes using hydrogen fuel cells playing a prominent role, the stock could be a once-in-a-lifetime opportunity for investors.
On the date of publication, Rich Duprey did not hold (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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
