Joby Continues to Impress: Growing Support From Financial Media

Joby Avi­a­tion con­tin­ues to impress with a con­sis­tent slew of pos­i­tive news. With the dynam­ic JoeBen Bevirt at its helm, the com­pa­ny is viewed as the eVTOL mar­ket leader, the pio­neer of this new indus­try. It flies the flag for the future of elec­tric air trav­el and along with EHang looks set to be the first to pass the che­quered flag with full cer­ti­fi­ca­tion and the promise of com­mer­cial flights in 2024.

It is of no sur­prise, the stock mar­ket is wak­ing up to Joby Avi­a­tion’s poten­tial and is being tak­en seri­ous­ly by even those once scep­ti­cal of this nascent indus­try and its future promise.

A for­mer doom-mon­ger­er, seekingalpha.com, has changed its tune, for exam­ple. Being one of the lead­ing and more respect­ed finan­cial web­sites, it has pub­lished sev­er­al upbeat arti­cles recent­ly laud­ing the mer­its of the com­pa­ny as a long-term BUY.

Last week a jour­nal­ist from Investor Trip, post­ed a sto­ry on the site, prais­ing Joby’s “first mover advan­tage, world-class engi­neer­ing team and USD1.2 bil­lion cash reserves.” It con­tin­ues, “The eVTOL mar­ket is set to explode in growth and Joby remains my favourite over­all eVTOL stock.”

What has helped, some might sug­gest, a tan­gi­ble fer­vour sur­round­ing Joby is that last week the com­pa­ny received the cru­cial FAA Part 135 cer­tifi­cate which allows the com­pa­ny to oper­ate com­mer­cial flights. Joby was award­ed the cer­ti­fi­ca­tion ahead of sched­ule, with com­ple­tion of the process orig­i­nal­ly expect­ed in the sec­ond half of this year. And this com­ing after the FAA has mod­i­fied its cer­ti­fi­ca­tion rules, where some ele­ments of the avi­a­tion media warned, per­haps wrong­ly, this would make it more dif­fi­cult for eVTOL com­pa­nies to gain such accep­tance.

Bon­ny Simi, the company’s Head of Air Oper­a­tions and Peo­ple, and one of Joby’s FAA-approved pilots, com­ment­ed, “Over the com­ing months, we will use our Part 135 cer­tifi­cate to exer­cise the oper­a­tions and cus­tomer tech­nol­o­gy plat­forms that will under­pin our mul­ti-modal ride-shar­ing ser­vice, while also refin­ing our pro­ce­dures to ensure seam­less jour­neys for our cus­tomers.”

Bon­ny Simi

The Part 135 Air Car­ri­er Cer­tifi­cate is one of three FAA approvals required for Joby to oper­ate its eVTOL air­craft as an air taxi ser­vice in cities and com­mu­ni­ties across the U.S, along­side the Type and Pro­duc­tion Cer­tifi­cates. Once Joby receives the for­mer, the com­pa­ny will com­plete the FAA review process to add the new air­craft type to its exist­ing air car­ri­er cer­tifi­cate.

Add to this the acco­lade that Joby is to be includ­ed in the Rus­sell 3000 after the mar­ket close on June 24th — the index tracks the per­for­mance of the 3,000 largest U.S‑traded stocks, which col­lec­tive­ly account for around 97 per­cent of all U.S‑incorporated equi­ties — the present low­ly share price of USD5.09 (June 6th), down 49 per­cent from its ini­tial USD10 open­ing lev­el last August, some might say this would be a good time to buy for a long-term hold.

Back to that seek­ing alpha arti­cle.

The jour­nal­ist writes, “I tru­ly believe the eVTOL indus­try will be a com­plete game chang­er.” This enthu­si­asm is such that Joby is then com­pared to the mete­oric share price rise of Tes­la. “You could have made a for­tune by invest­ing in Tes­la dur­ing the ear­ly days and hold­ing onto your shares.”

Such gid­dy heights of exu­ber­ance is then tem­pered with con­cerns sur­round­ing the present eVTOL indus­try hype. “I’ve per­son­al­ly spo­ken with many peo­ple about the growth of eVTOLs, yet no one feels com­fort­able rid­ing in an elec­tric air­craft. It may take longer for con­sumers to adopt them, but I do believe every­one will become obsessed with elec­tric air­craft over the next few decades.”

The arti­cle then points out the impend­ing major com­pe­ti­tion. “Sev­er­al eVTOL com­pa­nies will most like­ly fail with­in the next 5 years due to run­ning out of cash or sim­ply fail­ing to receive the prop­er FAA cer­ti­fi­ca­tions.” Explain­ing there is a chance, how­ev­er small, that Joby “could risk going bank­rupt if the com­pa­ny depletes its cash reserves before launch­ing a com­mer­cial ser­vice in 2024.”

If, for exam­ple, Joby can­not obtain the cru­cial type and pro­duc­tion cer­tifi­cates, then the com­pa­ny won’t be able to gen­er­ate any rev­enue and would lose all of its poten­tial long-term val­ue. This seems unlike­ly though, giv­en the huge amount of invest­ment big busi­ness has invest­ed in the eVTOL indus­try as a whole.

The journo con­cludes, “Joby Avi­a­tion reminds me of Tes­la in 2010 when it was an obscure com­pa­ny being backed by a bright-eyed eccen­tric leader named Elon Musk. I see many sim­i­lar­i­ties in Joby Avi­a­tion and a sim­i­lar lev­el of pas­sion and dri­ve in JoeBen Bevirt.”

Caveat Emp­tor

Behind such bull­ish enthu­si­asm there often lies a rea­son. In this case, the writer is hon­est enough to state, “Joby stock makes up 14 per­cent of my growth stock port­fo­lio and I plan to buy more shares lead­ing up to the 2024 com­mer­cial launch.”

(Do your own research and due dili­gence before pur­chas­ing any stock)

(Pics: Joby Avi­a­tion)