Is It Time To Take A Ride With Joby Aviation’s EV Innovations?

Key Points

• Joby Aviation is an innovative EV company on the brink of launching commercial operations. 
• The company's new partner, Delta Airlines, is injecting a minimum of $60 million into the technology. 
• The stock is at a post-IPO low and showing signs of a bottom. 

If you are interested in Joby Aviation (NYSE: JOBY) it may be time to get on board for the ride of a lifetime. The company is one of the most innovative EV company’s on the market and it is in production which is the primary component of a successful EV investment. For those that don’t know Joby Aviation or much about it, Joby Aviation is an EV manufacturer building a VTOL or eVTOL (electric vertical takeoff and landing) intended for fleet service. 

The goal is to build a fleet of aircraft that can be operated as transportation-as-a-service and there is not only a need but demand and industry interest. A use-case example the company gives on its website is a taxi service from downtown NYC to JFK airport. The trip usually takes about 50 minutes by car but could be accomplished in only 7 minutes with an eVTOL aircraft launching from a downtown heliport. 

Joby Aviation Is A Largely Derisked EV Company

Joby Aviation is largely derisked in regard to its status because it has a functional aircraft that is in production. The company has made more than 1000 test flights and recently received Part 135 Certification from the FAA. Part 135 Certification allows the company to operate its aircraft commercially in the US and was achieved roughly 6 months ahead of schedule. The certification process includes the submission of training and operating manuals and for Joby Aviation’s pilots to demonstrate knowledge and proficiency with those procedures. Joby Aviation is now working to build out its operations and hone the customer experience for on-demand service which is expected to launch in 2023/2024. The company has also applied for certification in Japan. 

Delta Airlines (NYSE: DAL) is one major carrier interested in this technology and is embracing it as part of improvements and enhancements to its customer-facing operations. Delta Airlines is making an initial $60 million investment into Joby Aviation’s operations with the intent of integrating it with Delta’s services for Delta Airlines customers. The deal could be worth as much as $200 million to Joby Aviation as milestones are hit. 

“Delta always looks forward and embraces opportunities to lead the future, and we’ve found in Joby a partner that shares our pioneering spirit and commitment to delivering innovative, seamless experiences that are better for our customers, their journeys, and our world,” said Delta CEO Ed Bastian. “This is a groundbreaking opportunity for Delta to deliver a time-saving, uniquely premium home-to-airport solution for customers in key markets we’ve been investing and innovating in for many years.”

The Sell-Side Is Interested In Joby Aviation 

The sell-side is interested in Joby Aviation including the analysts and the institutions. The analysts rate the stock a firm Hold verging on Buy although this is down from a weak Buy last year. More importantly, the price target, which is down 50% YOY, has firmed in the last few weeks and is still more than 80% above the current price action. Assuming the company is able to build on its momentum this target should hold and the stock price move higher as it approached the launch of commercial operations. 

The Technical Outlook: Joby Aviation Is Ready To Takeoff 

The price action in Joby Aviation has cratered since the IPO but showing a bottom now. The bottoming action began in early 2022 and was recently confirmed with a retest of and rebound from the $4 level. This action may pick up momentum over the next few weeks, months and quarters and could take the stock back up to the $6 level in the near to mid-term. Longer-term, the commencement of operations, revenue and earnings will (should) send this stock back up to its IPO level and higher.