2023 has been good to Joby Aviation (JOBY) investors. The shares have gained 167% year-to-date and the reason for that has nothing to do with AI, this year’s biggest trend. That said, investors are banking on the company being a different kind of innovator.
And they got some of that on Wednesday. Almost a quarter of the ytd share gains were generated in the session with the stock soaring by 40% after the electric vertical takeoff and landing (eVTOL) company released some good news.
Joby announced that the U.S. Federal Aviation Administration (FAA) had granted a special airworthiness certificate, issued for an aircraft constructed at Joby’s Marina pilot production facility in California. As a result of the FAA certification, Joby can now initiate the flight-testing phase for its production prototype aircraft.
The aircraft is also anticipated to be the first ever eVTOL aircraft delivered to a client. It is expected to move to the Edwards Air Force Base next year as part of Joby’s Agility Prime contract with the U.S. Air Force. The contract is worth up to $131 million. That deal aside, Joby intends to kick off commercial passenger operations in 2025.
The company also released the aircraft’s specifications, which Raymond James’ Savanthi Syth thinks were partly responsible for the surge. “Importantly,” says the 5-star analyst, “the MGTOW (maximum gross takeoff weight) of 5,300 lbs and payload of 1,000 lbs counters concerns around insufficient payload to accommodate a pilot plus four passengers.”
With that issue out of the way, Joby’s standing is significantly improved, although Syth is not quite ready to join the Joby bull-camp. “The greater weight compared to likely consensus expectations along with Joby’s industry-leading (and recently strengthened) balance sheet lowers the risk profile on shares, in our opinion,” she said. “However, unlike peers, given Joby’s vertically integrated business model it will not benefit from cash flows related to PDPs (pre-delivery payments) ahead of launching operations.”
For now, then, Syth remains on the sidelines with a Market Perform (i.e, Neutral) rating and no fixed price target in mind.
Others on the Street do have targets and with the average coming in at $10, the shares appear to now be trading for their fair value. Rating wise, the stock garners a Strong Buy consensus rating, based on 3 Buys and 1 Hold. (See JOBY stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
