Joby Aviation: Resounding “Thumbs Up” from Financial Markets after Release of Q4 Shareholder Letter

Last week was yet anoth­er mile­stone for Joby Avi­a­tion after the com­pa­ny released its share­hold­er let­ter cov­er­ing Q4, 2022. Not only did the finan­cial mar­kets warm­ly embrace the report, but for the first time are broad­ly tak­ing the com­pa­ny seri­ous­ly as a poten­tial share invest­ment for the future.

While, 2022 was an up-and-down year for Joby Avi­a­tion, in par­tic­u­lar, the damn­ing report from Bleek­er Street Research in Octo­ber with the charm­ing head­line, ‘Joby Aviation…is Set To Crash and Burn’, the com­pa­ny con­tin­ues to forge ahead unper­turbed by such neg­a­tive crit­i­cism.

Joby Avi­a­tion: “Actions Speak Loud­er Than Words”

Fourth Quar­ter 2022 High­lights

Means of Com­pli­ance Com­plete

We effec­tive­ly com­plet­ed the sec­ond of five stages required by the Fed­er­al Avi­a­tion Admin­is­tra­tion (FAA) to cer­ti­fy our air­craft for com­mer­cial pas­sen­ger use, in what we believe is a first for the eVTOL indus­try.

FAA Admin­is­tra­tor Vis­it

We host­ed act­ing FAA Admin­is­tra­tor, Bil­ly Noel, and mem­bers of his team at our pro­duc­tion facil­i­ty, where they were able to see our pilot man­u­fac­tur­ing line and observe one of our reg­u­lar test flights.

Cer­ti­fi­ca­tion Progress

We also made sub­stan­tial progress in the lat­er stages of the type cer­ti­fi­ca­tion process, with an addi­tion­al four Area Spe­cif­ic Cer­ti­fi­ca­tion Plans (ASCPs) sub­mit­ted to the FAA, a total of five ASCPs now accept­ed, and the suc­cess­ful com­ple­tion of the sec­ond of four Sys­tem Review stages.

Final Assem­bly Begins

We began final assem­bly of the first air­craft to be man­u­fac­tured on our pilot pro­duc­tion line. Hav­ing built the major aerostruc­tures — the wing, tail, and fuse­lage — we are now mat­ing the struc­tures togeth­er and installing wor­ing, elec­tron­ics and oth­er sys­tems.

The report states, “At the end of the fourth quar­ter of 2022, we had USD1.1 bil­lion in cash and short-term invest­ments, includ­ing Delta’s upfront equi­ty invest­ment of USD60 mil­lion received in the quar­ter. Net cash used in oper­at­ing activ­i­ties and pur­chas­es of prop­er­ty and equip­ment totalled USD291 mil­lion in 2022, with USD84 mil­lion spent in the fourth quar­ter. In the quar­ter, we acquired land and facil­i­ties in San­ta Cruz for USD25.5 mil­lion to sup­port Joby’s long-term growth.”

It con­tin­ues, “Our net loss of USD66.9 mil­lion reflect­ed oper­at­ing expens­es of USD101.4 mil­lion par­tial­ly off­set by oth­er income of USD34.5 mil­lion. Oper­at­ing expens­es reflect­ed pri­mar­i­ly our con­tin­ued progress cer­ti­fy­ing the air­craft and ear­ly man­u­fac­tur­ing oper­a­tions and includ­ed stock-based com­pen­sa­tion expens­es of USD17.2 mil­lion. Oth­er income includ­ed a favourable reval­u­a­tion of deriv­a­tive lia­bil­i­ties worth USD25.9 mil­lion and inter­est income on our invest­ments. “

Share­hold­ers Full Let­ter Q4 2022

https://joby-site.cdn.prismic.io/joby-site/97725fa5-be1a-4905-a15d-66b6d0e04af1_Joby_Q42022_Shareholder_Letter.pdf

The finan­cial web­sites jumped onboard. Two of the lead­ing sites are The Mot­ley Fool and Seek­ing Alpha. The Fool writes, “Joby lost more mon­ey than expect­ed in the most recent quar­ter, but the big­ger news is that the air-taxi pio­neer is on course to nav­i­gate through the rig­or­ous cer­ti­fi­ca­tion process and has begun final assem­bly of its air­craft.”

It con­tin­ues, “Joby appears to be ahead of the com­pe­ti­tion in the race to bring an eVTOL to mar­ket, based on where it stands with the FAA, and its pro­to­type has already logged more than 10,000 miles of flight test­ing… While the com­pa­ny post­ed an oper­at­ing loss of USD66.9 mil­lion in the fourth quar­ter and will con­tin­ue to burn cash until the FAA process is com­plete, it has USD1.1 bil­lion in cash and invest­ments in the bank.”

Adding, “There is still a lot of risk here, (but) the com­pa­ny is demon­strat­ing it is mov­ing in the right direc­tion. For those seek­ing high-risk, high-reward options for a well-diver­si­fied port­fo­lio, Joby deserves a look.”

Seek­ing Alpha com­ments, “Joby’s results show encour­ag­ing progress. If you com­pare it to oth­er pub­licly trad­ed eVTOL com­pa­nies, you’ll find that it’s been work­ing on the tech­nol­o­gy for longer, is more ver­ti­cal­ly inte­grat­ed, and has ben­e­fit­ed from strate­gic man­u­fac­tur­ing part­ner­ships like the one with Toy­ota. This first-mover advan­tage will be sub­stan­tial. Fol­low­ing cer­ti­fi­ca­tion, I expect a mar­ket oppor­tu­ni­ty greater than the cur­rent size of the heli­copter mar­ket.” Adding, “As new appli­ca­tions are found for Joby, I believe the mar­ket for it will grow to a size that could sur­prise many indus­try experts.”

The arti­cle con­cludes, “I remain a buy. The com­pa­ny seems to be on the right track. I antic­i­pate pas­sen­ger ser­vice to begin in 2025 as planned and with ongo­ing progress in com­pli­ance, man­u­fac­tur­ing and test­ing, I believe Joby is well-posi­tioned to suc­ceed despite any obsta­cles it may encounter. While invest­ing in the com­pa­ny requires an extreme long-term view and high tol­er­ance for volatil­i­ty, I have con­fi­dence that the com­pa­ny is equipped to exe­cute its plan and achieve its goals.”

A stamp of approval then came from Bloomberg TV with a pos­i­tive 3’.53” inter­view with Joby Founder and CEO, JoeBen Bevirt.

Watch Video

https://www.bloomberg.com/news/videos/2023–02-24/joby-ceo-on-2023-evtol-milestones-video

Mean­while, investchronicle.com led with the head­line, “Investors Have A Lim­it­ed Win­dow Left To Buy Joby”; setenews.com had the grab­bing “Joby: Pre­pare your­self for Liftoff”; and nasdaq.com got ‘all day-trader­ish and tech­ni­cal’ with “Joby makes bull­ish cross above crit­i­cal mov­ing aver­age.”

Then dbtnews.com com­ment­ed, “Based on care­ful and fact-backed analy­ses by Wall Street experts, the cur­rent con­sen­sus on the tar­get price for Joby shares is USD7.62 per share (com­pared to the present USD4.55).” More impor­tant­ly, after the report was released stocks held by insti­tu­tion­al investors “increased by around 20.3 mil­lion shares.” Present­ly, they hold close to 193 mil­lion, accord­ing to a lat­est SEC report fil­ing.

The ensu­ing pub­lic­i­ty cre­at­ed an imme­di­ate stir in the finan­cial mar­kets pro­pelling Joby shares up 16 per­cent dur­ing last Thursday’s trad­ing day.

Com­ments on the finan­cial bul­letin boards were as expect­ed: polarised. From Natturner1966, “That’s a huge vote of con­fi­dence for Joby. I’m buy­ing more shares this week,” to energyguy921 post­ing, “This com­pa­ny will nev­er get off the ground. They are sell­ing a con­cept to meme traders and clue­less dopes. Avoid at all costs!”

Cer­tain­ly, 2023 is look­ing a lot rosier for Joby and JoeBen. By being ahead of the pack, the com­pa­ny is in poll-posi­tion for first-mover advan­tage. Add to this the con­sis­tent and pos­i­tive news ema­nat­ing from the com­pa­ny which evtolinsights.com reg­u­lar­ly cov­ers, whether it is about Osa­ka and Dubai, com­pli­ance test­ing from Cal­i­for­nia or the increas­ing tri­als for the USAF, Joby may be a risky long-term invest­ment, but one per­haps, that is worth the gam­ble, espe­cial­ly when the share price remains at such a low lev­el.

For more infor­ma­tion

https://www.jobyaviation.com/

https://www.fool.co.uk

https://seekingalpha.com

(Top image: Joby Avi­a­tion)