Electric vertical takeoff and landing aircraft (eVTOL) maker Joby Aviation (NYSE:JOBY) should be on your radar. As it begins to rapidly advance toward receiving Type Certification from the Federal Aviation Administration, shares of the eVTOL leader will soon be going vertical.
Joby Aviation stock is already up 20% over the past month. It took off in early July after completing a 523-mile trip in a hydrogen-electric aircraft. While the plane maker’s primary craft is all-electric, it more recently views the mixed-power craft as the vehicle that will allow its regional air mobility (RAM) taxi service to thrive.
With Joby scheduled to report second quarter earnings on Aug. 7, investors should prepare for its stock to take flight.
Don’t Worry About JOBY’s Financials
Joby Aviation is, of course, a pre-revenue stock. It and several other companies are creating the RAM industry from the ground up. While it does have significant financial backing from deep-pocketed investors to help it get off the ground, the only revenue it receives is from achieving milestones from partners.
For example, in the first quarter it reported having just $25 million in revenue for the period. That was the result of having delivered to the U.S. Air Force its test aircraft as part of a $131 million contract.
So when JOBY reports its second quarter results, don’t expect there to be much more in its coffers. Yet depending upon which milestones it achieved in the period that are covered under its contracts, it could report higher or lower numbers. But that’s not what is important for Joby Aviation stock right now.
The real crux of its business is obtaining the Type Certification, which will allow it to begin commercial operations. The eVTOL leader says it is on track for that to still occur in 2025.
On the Path to Commercialization
I’ll admit to believing Joby stock would have taken off after its first quarter earnings release. Many of the same arguments applied then. Instead, Joby Aviation stock tumbled after their release. That was a shortsighted response by the market.
It will be the same if the stock reacts similarly after the second quarter report. In fact, if Joby Aviation stock does fall afterward, investors interested in literally getting in on the ground floor of a huge opportunity should pounce. Any discount you can get on the stock will be worth it.
Because you can’t analyze JOBY on traditional metrics, it comes down to a belief in whether the eVTOL stock can make good on its promises. So far Joby Aviation has proven reliable.
The company is the furthest along in the FAA’s labyrinthine regulatory process. It has secured certifications in good order that allow it to continuously advance to the next phase. JOBY has successfully made it through three of the five stages so far, and as noted, Type Certification is the final one.
Powerful Partners Backing Liftoff
Joby Aviation is now looking at both short-haul and longer haul transport. The all-electric vehicles are intended to go from local airports to nearby cities. It plans to work with Delta Air Lines (NYSE:DAL) to operate a robotaxi service out of Delta’s hubs at John F. Kennedy International Airport, LaGuardia International Airport and Los Angeles International Airport. Also, the firm convinced New York City to electrify its helipads to make them accessible to its aircraft.
In addition, Joby Aviation is backed by Toyota (NYSE:TM), which is helping to finance the build out of its manufacturing facility for commercial production.
As we saw after the first quarter, Joby Aviation stock can go in either direction. Yet that shouldn’t deter investors. The eVTOL industry is a promising new adventure in a mature and rather static air transport industry. Be ready to buy JOBY stock no matter which way its shares turn after earnings.
On the date of publication, Rich Duprey did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.