Here’s why the Joby Aviation stock price could surge 50%

by Crispus Nyaga
December 11, 2024

Joby Aviation share price has rallied to its highest level in over a year.

The company has made a lot of progress as gears toward commercialization.

Technicals suggest that the stock has more upside in the near term.

Joby Aviation stock price has bounced back this year as investors anticipate its upcoming commercialization phase. It soared to a high of $9.30, its highest level since July 2023, pushing its market cap to over $6.5 billion.

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Joby Aviation has made progress

JOBY has emerged as the biggest player in the electric vertical take off and landing (eVTOL) industry. This fairly new industry is expected to do well over time. Estimates are that the industry will be worth over $23.2 billion in 2028 and $38.24 billion by 2032.

There is a need for these eVTOL products in most cities as traffic has continued rising over time. This industry would do well in highly congested cities like in the United States, Japan, Brazil, and London. Instead of driving, one will just need to hop into an emission-free aircraft and reach the destination within minutes.

Joby Aviation has made a lot of progress in the past few years and is now looking forward to commercializing its business. Over time, the company hopes to sell its aircraft to individuals and companies. Also, it hopes to become a leading operator of air taxi services.

The company has achieved several regulatory approvals. Just this month. It received the FAA approval for flight academy, allowing it to train pilots for its crafts. Its academy will let it have a full pipeline of qualified pilots when the commercialization process start.

Joby Aviation has also continued with its FAA certification process. It is now in the fourth and fifth stages of certification, a process that is expected to be completed in 2025.

Read more: Joby Aviation: is it a good flying car stock to buy?

Partnerships and balance sheet

Most importantly, Joby Aviation has the financial resources it needs as it prepares for the commercialization process. It ended the last quarter with over $710 million in cash and short-term investments.

The company also raised about $222 million in a follow-on offering and $500 million from Toyota, the biggest automaker by sales. These funds brought the total hoard in its balance sheet to over $1.4 billion.

Having Toyota on its board is an important thing because of its history of manufacturing. Over time, Toyota has emerged as one of the best manufacturers in the world. As such, there are chances that it will transfer these skills to Joby.

These are huge sums of money that will help it to offset its cash burn ahead of the commercialization process. The last financial results showed that Joby Aviation had a net loss of about $144 million and an adjusted EBITDA loss of about $120 million.

Another positive is that Joby Aviation is in a pole position in the eVTOL industry. It will likely be the first major American company to receive certification, followed by Archer Aviation.

The company has also received big orders from the US Airforce, Delta Air Lines, and NASA. It has also inked deals abroad.

The risk, however, is that the company will likely need to raise additional cash by selling shares because its profitability will take time. Also, it is unclear whether its business will keep growing as expected since all estimates have been hypothetical.