Joby Aviation (NYSE:JOBY) stock is a soar-or-sink investment that, under the right circumstances, could go straight to the top in the coming quarters. I am bullish on JOBY stock, though it’s a high-risk stock.
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California-based Joby Aviation develops “all-electric, vertical take-off and landing aircraft,” which is a fancy way of saying the company builds flying taxis. The “vertical take-off” part basically means that the aircraft can go straight up before moving laterally to its destination.
Joby Aviation plans to release its second-quarter earnings results on August 2 after the market closes. Will you be positioned for gains if JOBY stock flies higher? It’s worth considering, as Joby Aviation might not be favored by every analyst, but the company has positive news to report in the U.S. and abroad.
JOBY Stock’s Rally Reflects a “Risk-on” Market
Someday, Joby Aviation could turn science fiction into reality by populating the skies with flying taxis. However, at least one expert on Wall Street doesn’t seem fully convinced that JOBY stock is ready for takeoff.
We’ll get into the consensus opinion of Joby Aviation in a moment, but for now, we should consider the cautionary tone of JPMorgan Chase (NYSE:JPM) analyst Bill Peterson. He downgraded JOBY stock from a Hold to a Sell rating, and JPMorgan Chase suggested that the stock’s strong performance in June and July reflected a “risk-on environment” by retail investors as well as short covering, “with the stock performance decoupling from fundamentals.”
At the same time, JPMorgan Chase raised its price target on Joby Aviation stock from $5 to $6, though this still implies a drawdown from the current share price. I’ll acknowledge that the sudden rally in JOBY stock had a meme-like feel to it, and Joby Aviation’s fundamentals aren’t ideal, as the company has yet to achieve profitability.
Coming into an earnings announcement, Joby Aviation will likely report another unprofitable quarter. Analysts expect the company to post second-quarter 2023 earnings of -$0.15 per share. I can understand if this is a deal-breaker for some risk-averse investors, but let’s delve into Joby Aviation’s recent achievements before dismissing the company altogether.
Joby Aviation Makes Progress in the U.S. and South Korea
While Joby Aviation’s financials aren’t ideal, the company could be profitable in the future. Already, there are signs that Joby Aviation is demonstrating progress on two different continents.
In the U.S., Joby Aviation earned a Special Airworthiness Certificate from the Federal Aviation Administration (FAA) for one of its aircraft. It’s a major milestone moment for Joby Aviation since it means the company can commence “flight testing of its first production prototype,” which Joby plans to move to an Air Force base in 2024.
Furthermore, Joby Aviation recently submitted all of its Certification Plans to the FAA. This event, the company states, represents “further progress toward completing the third of five stages required to certify” Joby’s “aircraft for commercial use.” It’s a step toward the company’s goal of launching commercial aircraft service in 2025, according to Didier Papadopoulos, Head of Aircraft OEM at Joby Aviation.
Meanwhile, halfway around the world, Joby Aviation just expanded its partnership with South Korean telecommunications company SK Telecom (NYSE:SKM). This agreement, Joby Aviation reports, “paves the way for Joby to participate alongside SKT” in a South Korean demonstration program known as the K-UAM Grand Challenge. Moreover, SK Telecom is reportedly making a $100 million equity investment in Joby Aviation.
Is JOBY Stock a Buy, According to Analysts?
Turning to Wall Street, JOBY stock comes in as a Hold based on three Buys, two Holds, and two Sell ratings. The average Joby Aviation stock price target is $8.17, implying 6.6% downside potential.
If you’re wondering which analyst you should follow if you want to buy and sell JOBY stock, the most accurate analyst covering the stock (on a one-year timeframe) is Andres Sheppard of Cantor Fitzgerald, with an average return of 21.47% per rating and a 67% success rate. Click on the image below to learn more.
Conclusion: Should You Consider JOBY Stock?
Make no mistake about it – there are risks involved here, as Joby Aviation’s fundamentals aren’t perfect. Still, whether you consider investing in Joby Aviation, it would undoubtedly be exciting to take an early stake in the future of urban aviation.
At the very least, I invite you to keep an eye on Joby Aviation because the company could pave the way for a hyper-growth industry someday. If you’re ready to consider a pre or post-earnings position in JOBY stock, I’d definitely say it’s worth considering as long as you’re prepared for a lot of turbulence.
