Full Disclosure: I bought the stock at just under $6.
I have driven in just about every major horrible rush hour in the United States. The Beltway in D.C., Los Angeles, the Bay Area in Northern California, South Florida and even New York have all done their damage on my Psyche. The Beltway was so bad that I sometimes would imagine that it would be great to get out of my car and fly over the traffic and head home.
Well, that may be a real possibility now. The creation of EVTOLs or Electric Vehicle Take Off and Landing Vehicles may be the game changer I have been waiting for. The final answer to over population and the congestion of highways/freeways.
One of the main players in the game and a stock that can be bought is Joby Aviation. Joby has been working years to get FAA approval and create a functioning air taxi service that sits up to four people with a pilot. Imagine going to LAX in minutes during the holidays rather than forty-five minutes to two hours. Joby has already acquired Blade, a helicopter service company as well as the part of Uber that would cover air taxi service.
The Pros
Multiple countries have shown interest in buying Joby aircrafts. Saudi Arabia, the UAE, and Kazakhstan have all showed interest in purchasing the vehicles. Also, Japan is working on building a vertiport system that could make it possible for Joby to fly 100 air taxis in cities across Japan. Richard Branson of Virgin Airlines has showed interest in using Joby to provide air taxi services for customers in Britain.
Joby has a large cash amount on hand. Around 978 million dollars which is great because they will need that to keep making adjustments to get FAA certification. As already mentioned they acquired Blade helicopter service which provides services in New York and Europe. The goal is once Joby gets FAA certification they will transition from helicopters to their EVTOLs which are quieter and need less maintenance.
Another main benefit of Joby as a business model is that their goal is both to sell the vehicles and have a vertical business as well. A customer would basically open up their Uber app and book a flight wherever air taxi service is provided. Joby would receive the revenue of those flight bookings as well because they acquired that part of the Uber app. While other countries may just buy the vehicles, in America and some other countries most likely, any flights booked through the Uber app, the revenue will belong to Joby. This makes a for a longer more sustainable business model.
Furthermore, the Trump administration has fully backed the acceleration of the air taxi service. "The next great technological revolution in aviation is here. The United States will lead the way, and doing so will cement America’s status as a global leader in transportation innovation," said U.S. Transportation Secretary Sean P. Duffy. "That means more high-paying manufacturing jobs and economic opportunity. By safely testing the deployment of these futuristic air taxis and other AAM (Advanced Air Mobility) vehicles, we can fundamentally improve how the traveling public and products move."
The Cons
The number one negative of course is the company has not been FAA certified yet. They will never make big money until all these countries give them certification to fly. Another downside is that the company has raised money by selling shares and the float has become a little high. The current shares outstanding is 911 million shares. That’s a big float for a company with no major revenue and no ability to make major revenue until their vehicles gain certification. Another downside is that there is competition out there like Archer Aviation.
Conclusion
The bottom line is at this point in time is Joby Aviation a buy with a current stock price of $13.94? That currently gives the company a roughly 12.7 billion dollar valuation and while they have many potential billion dollar deals set up, until they pass regulation, there are no guarantees for anything. I however think they will get FAA certified and I think these vehicles are the answer to the highway congestion that has been plaguing travel for the past 20 years. With an estimated potential revenue of 280 billion dollars per year by 2045 the potential for return is well worth the price right now. So yeah, I do think Joby is a buy but I still caution the stock is speculative and one should not get crazy with the amount of money put into this stock.