Flying cars have been one of the more intriguing investments for speculative investors in the last 12 months. What used to be considered an exciting but perhaps impractical mode of transportation got a lift from the electrification movement that popularized drones. And even if fully autonomous driving never grows at scale, the same technology needed there is being used to create electric vertical take-off and landing eVTOLs (i.e., flying cars).
But is it time to invest in flying car stocks? That's a question every investor has to answer for themselves. Almost every company in this space is not only years away from turning a profit but also lacks revenue. That's not a reason for or against investing; it just helps you understand the risk.
However, you should also understand the opportunity. According to Allied Market Research, the flying car market will be valued at $215.54 million in 2025 but will increase to over $3.8 billion by 2035. That's a compound annual growth rate of 34.1%. Remember that this is a global market in which some of the most significant growth may come from outside the United States.
In this special presentation, we're focusing on seven stocks that long-term-oriented investors may want to consider as the flying car industry continues to take flight.
Quick Links
- Joby Aviation
- Archer Aviation
- EHang Holdings
- Vertical Aerospace (EVTL)
- Eve Holding (EVEX)
- Boeing
- Blade Air Mobility (BLDE)
#1 - Joby Aviation (NYSE:JOBY)
Joby Aviation Inc. (NYSE: JOBY) is one of the leading names in the eVTOL sector. A key reason for that is the company is the furthest down the path toward certification by the United States Federal Aviation Administration.
The company has completed three of the five certification stages required by the FAA and is on track to finish the process early in 2025. Joby also has existing contracts with the U.S. Department of Defense (DOD) to deliver aircraft to MacDill Air Force Base in 2025.
The caution regards earnings. In its February 2024 earnings report, the company beat expectations by posting a loss of 17 cents per share. However, that was worse than the negative 14 cents per share it posted in the prior year.
Cash burn is to be expected, and Joby still has over $1 billion of cash on hand to get their flying cars in the air. But the company has received Investment dollars from Toyota Motor Co. (NYSE: TM), Uber Technologies Inc. (NYSE: UBER), and South Korean SK Telecom (NYSE: SKM) to help keep the dollars flowing.
That said, short interest continues to hover around 20%. However, as of May 6, 2024, JOBY stock has 45% institutional ownership, which shows that the “smart money” is interested in the sector.
About Joby Aviation
Joby Aviation, Inc, a vertically integrated air mobility company, engages in building an electric vertical takeoff and landing aircraft optimized to deliver air transportation as a service. The company intends to build an aerial ridesharing service, as well as developing an application-based platform that will enable consumers to book rides.
Read More - Current Price
- $7.69
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 4 Buy Ratings, 1 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $8.35 (8.6% Upside)
#2 - Archer Aviation (NYSE:ACHR)
Archer Aviation Inc. (NYSE: ACHR) may not beat Joby Aviation to the finish line, but it won’t be far behind. Archer has already completed the first stage of the FAA certification process. And, like Joby, it expects to begin commercial flights in 2025.
Archer has a partnership with United Airlines Holdings Inc. (NASDAQ: UAL), which started in 2021. Initially, the partnership was designed to help with manufacturing. That has expanded to include the announcement of two point-to-point routes, one between Manhattan and Newark Airport and, most recently, between downtown Chicago and O’Hare International Airport. The company is also negotiating with the United Arab Emirates (U.A.E.) to launch an air taxi program in the country by 2026.
Archer faces many of the same risks as Joby Aviation. With short interest of over 28%, the company is still years away from turning a profit. Interestingly, 59% of ACHR stock is owned by institutions, a fact that investors could view as a vote of confidence.
About Archer Aviation
Archer Aviation Inc, together with its subsidiaries, engages in designs, develops, and operates electric vertical takeoff and landing aircraft for use in urban air mobility. The company was formerly known as Atlas Crest Investment Corp. and changed its name to Archer Aviation Inc The company is headquartered in San Jose, California.
- Current Price
- $9.49
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 7 Buy Ratings, 1 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $10.63 (12.0% Upside)
#3 - EHang Holdings (NASDAQ:EH)
The flying car industry is international in scope. As you might expect, China is one of the largest markets, which is why you should consider EHang Holdings Limited (NASDAQ: EH). In April 2024, the company’s EH216-S pilotless eVTOL aircraft successfully completed its first autonomous flight in Abu Dhabi, the company’s first flight in the state.
Investors should note that EHang has received approval through the Civil Aviation Administration of China (CAAC). This is not the same as the FCC in the United States, and industry observers note that the guidelines for approval by the CAAC are not as stringent as those of the FCC.
Nevertheless, the approval does mean the company is in the production phase and is generating revenue. EHang is not yet profitable, but the company is ahead of the industry. That’s reflected in analyst sentiment. In early April, Morgan Stanley (NYSE: MS) initiated coverage on EHang and gave EH stock an Overweight rating with a $27.50 price target that marks a 58% upside from the stock’s price on May 6, 2024.
About EHang
EHang Holdings Limited operates as an autonomous aerial vehicle (AAV) technology platform company in the People's Republic of China, East Asia, West Asia, Europe, and internationally. It designs, develops, manufactures, sells, and operates AAVs, as well as their supporting systems and infrastructure for various industries and applications, including passenger transportation, logistics, smart city management, and aerial media solutions.
Read More - Current Price
- $15.01
- Consensus Rating
- Buy
- Ratings Breakdown
- 3 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $24.75 (64.9% Upside)
#4 - Vertical Aerospace (EVTL) (NYSE:EVTL)
Vertical Aerospace Ltd. (NYSE: EVTL) is a U.K.-based eVTOL company with a market cap of just 169.26 million. It illustrates the risk in the flying car sector.
The company has a prototype that is in the midst of the certification process. However, the company suffered a crash during a test flight that will delay its certification into 2026. That puts it behind the schedule of some of the other companies in the sector.
But not being first shouldn’t take it off your list. What is more concerning is that in late 2023, the company made a fixed-shelf filing to raise up to $180 million in cash. Second, the company received a delisting notice from the Nasdaq in December 2023. As of May 6, 2024, EVTL stock had yet to meet the requirements to meet the requirement. This could mean that a reverse stock split is imminent.
About Vertical Aerospace
Vertical Aerospace Ltd., an aerospace and technology company, engages in designing, manufacturing, and selling zero operating emission electric vertical takeoff and landing (eVTOL) aircraft for use in the advanced air mobility in the United Kingdom. It offers VX4, an eVTOL aircraft. Vertical Aerospace Ltd.
Read More - Current Price
- $7.89
- Consensus Rating
- Hold
- Ratings Breakdown
- 2 Buy Ratings, 1 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $10.33 (31.0% Upside)
#5 - Eve Holding (EVEX) (NYSE:EVEX)
Unlike the other pure-play companies on this list, Eve Holding Inc. (NYSE: EVEX) does not have a prototype in the certification process. That means the company won’t provide commercial flights (i.e., generate revenue) until 2026. An investment in EVEX stock will require some patience.
But that patience could be rewarded. Eve is a subsidiary of the airline maker Embraer. The company also has a partnership with United Airlines Inc. (NYSE: UAL) for 200 of its air taxis. And the story gets better. Eve has non-binding Letters of Intent (LOIs) for 2,850 aircraft.
Eve believes it has the capital to get through 2025, and with Embraer as a parent company, investors shouldn’t be too worried about liquidity. That’s why investors seem to be excited about the stock. EVEX stock has a Moderate Buy rating with a price target of $8.50, which is 54.5% higher than the closing price on May 6, 2024.
About EVE
Eve Holding, Inc, together with its subsidiaries, develops urban air mobility solutions. It is involved in the design and production of electrical vertical take-off and landing vehicles (eVTOLs); provision of eVTOL service and support capabilities, including material services, maintenance, technical support, training, ground handling, and data services; and development of urban air traffic management systems.
Read More - Current Price
- $5.01
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 3 Buy Ratings, 1 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $6.00 (19.8% Upside)
#6 - Boeing (NYSE:BA)
The Boeing Company (NYSE: BA) gives less risk-tolerant investors a way to invest in the flying car sector. Boeing is one of the companies that are providing its expertise to the emerging eVTOL industry.
The company is one of the investors in Wisk. This start-up is testing its Generation 6 autonomous eVTOL, which the company describes as the “most advanced, autonomous, four-passenger eVTOL air taxi in the world.” Boeing is also bringing its expertise to bear in the Boeing Aerospace & Autonomy Center at MIT, which opened in October 2022.
Investing in Boeing gives you exposure to the company’s commercial airline business, which has been dragging down the stock for several years. But you’re also investing in one of the leading companies in the growing space economy.
The bottom line is that Boeing is a company that has a presence in many areas of the aerospace industry. Analysts are bullish on the 12-month outlook for the stock, making this an ideal time to take a closer look at BA stock.
About Boeing
The Boeing Company, together with its subsidiaries, designs, develops, manufactures, sells, services, and supports commercial jetliners, military aircraft, satellites, missile defense, human space flight and launch systems, and services worldwide. The company operates through Commercial Airplanes; Defense, Space & Security; and Global Services segments.
Read More - Current Price
- $177.35
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 13 Buy Ratings, 10 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $190.11 (7.2% Upside)
#7 - Blade Air Mobility (BLDE) (NASDAQ:BLDE)
Blade Air Mobility Inc. (NASDAQ: BLDE) is well known for providing alternative forms of air transportation. Specifically, the company is a pioneer in the urban air mobility space. In addition to its reputation as the Uber of helicopters in the United States, the company has expanded into Canada and Europe and conducts medical flights.
The company’s asset-light model is allowing the company to generate revenue that is growing year-over-year. The company is partnering with companies such as Wisk (see Boeing) in transitioning to the eVTOL sector.
Blade isn’t profitable at the moment, but it is cash flow positive. That said, BLDE stock is trading for just $3.55 as of May 6, 2024. For speculative investors willing to take some risk, Blade may represent the biggest hidden gem in the sector.
About Blade Air Mobility
Blade Air Mobility, Inc provides air transportation alternatives to the congested ground routes in the United States. It provides its services through charter and by-the-seat flights using helicopters, jets, turboprops, and amphibious seaplanes. The company was founded in 2014 and is headquartered in New York, New York.
- Current Price
- $3.84
- Consensus Rating
- Buy
- Ratings Breakdown
- 1 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $6.00 (56.3% Upside)
What are the risks of flying car stocks? It comes down to safety and regulation. The safety issue is obvious. The certification process is rigorous for good reasons. And even when a company receives FAA certification, the work isn't over. These companies must continue to meet FAA regulations that will evolve over time.
Flying cars are also a new class of aviation that must be brought into the existing air traffic control system. This process is ongoing, but it's still something for investors to watch.
That being said, your decision to invest in flying car stock will depend on your risk tolerance? Many of these stocks still feature high short interest and are not widely owned by institutions. That can make the price swings volatile in both directions.
Nevertheless, it's a good time to start watching these stocks. And MarketBeat All-Access members can create an unlimited number of watchlists. You'll never miss an important headline, analyst upgrade/downgrade, or SEC filing that affects a stock on these lists.
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