Joby Aviation (JOBY 3.80%) is an aviation start-up with big ambitions. In a nutshell, it wants to build flying taxis — electric vertical takeoff and landing (eVTOL) aircraft — to chauffeur commuters over heavily congested urban streets.
If a 10-minute hop in a quiet electric aircraft sounds better than an hour-long slog through on-ground traffic, then you might understand why Morgan Stanley once estimated the eVTOL market would be worth about $9 trillion by the middle of this century.
Image source: Joby Aviation.
Joby could easily end up being the brand of flying taxis in the future. Indeed, although it is still neck and neck with its rival Archer Aviation (ACHR 1.69%) in the race for regulatory approval, Joby looks better positioned right now to become the Uber (UBER 0.01%) of the skies.
Not only because it has literally partnered with Uber, but also because operationally, it’s closer to launch than Archer. More significantly, it wants to build all its aircraft components in-house, rather than outsourcing them to other suppliers (Archer’s approach). This could give it tighter control over its economics, improving margins over the long run.
Joby currently has a roughly $10.5 billion market cap, which is hefty for an aviation stock with no meaningful revenue. If the stock reached Uber’s current market valuation of about $155 billion, it would grow about 15 times today’s price. That could, in turn, generate a sizable investment — though you would also need to invest a sizable sum to grow it into a million.
Today’s Change
(-3.80%) $-0.42
Current Price
$10.64
Key Data Points
Market Cap
$11B
Day’s Range
$10.27 – $11.04
52wk Range
$6.42 – $20.95
Volume
28M
Avg Vol
26M
Gross Margin
-1606.00%
For example, at today’s price — around $11 — a $67,000 investment is needed to reach $1 million on a 15x return. That’s a lot of money for a company that hasn’t yet proven its business model commercially.
For now, Joby is still a speculative play on a nascent industry. What looks like a multi-trillion idea could still prove to be a castle in the sky. Aggressive investors might want to open a small position, but Joby is definitely not a stock to dump your nest egg into.
Steven Porrello has positions in Archer Aviation and Joby Aviation. The Motley Fool has positions in and recommends Uber Technologies. The Motley Fool has a disclosure policy.