Dividend Stocks

If You Aren’t Watching JOBY Stock, You Could Be Missing Out

Joby Aviation (NYSE:JOBY) stock is making headlines as the company’s plans for an electric vertical takeoff and landing aircraft production facility in Ohio shake out.

This might create thousands of jobs, allowing for the manufacturing of around 500 aircraft annually. This move signals the potential transformation of the “flying car” industry from sci-fi to reality.

However, investors may rightly wonder if it’s the right time to invest and if JOBY is the ideal choice.

This is a stock that’s still nearly doubled on a year-to-date basis, but has some negative momentum (down nearly 50% from its summer high). Negative momentum can be scary, so let’s see if buying into this weakness is worthwhile for long-term investors.

Recent News

Dayton International Airport plays a vital role in Ohio’s growth, and Joby Aviation will invest up to $500 million near the airport. The company has constructed an electric air taxi manufacturing site at Dayton International Airport, marking a new era in aviation.

The facility will manufacture electric air taxis for commercial passenger use, capable of flying at 200 mph for 100 miles. Joby will invest over $477 million, aiming to produce 500 vehicles annually, starting production in 2025. Construction of this facility begins next year.

JoeBen Bevirt, CEO of Joby Aviation, expressed pride in Ohio’s aviation heritage and their role in the industry’s future.

In June, the Federal Aviation Administration issued Joby Aviation a Special Airworthiness Certificate, enabling test flights for their eVTOL aircraft prototype.

Delta Air Lines (NYSE:DAL) partnered with Joby for urban air transportation services in New York and Los Angeles.

Toyota (NYSE:TM) help establish Joby’s pilot production line in California and will provide guidance as manufacturing begins in Ohio.

There Are Reasons to Be Bearish

Investors should know the inherent risks in early-stage companies and industries. These risks are clearly demonstrated by JOBY stock’s recent fluctuations. 

The incredible year-to-date surge of nearly 200% to June has been cut in half. That’s partly because JOBY stock looked pricy, considering the company won’t be profitable this year. It’s unclear whether next year will bode any better for the company.

Furthermore, JPMorgan (NYSE:JPM) analysts downgraded JOBY stock because of a perceived overblown rally in its shares, causing a decline in its price.

Investors will want to keep an eye on this bearish narrative, as it appears to be building and reinforcing the stock’s recent move.

JOBY Could Resume Its Move Higher

Joby Aviation aspires to lead the eVTOL sector’s evolution. They’ve made history with a liquid hydrogen-powered electric aircraft, pushing innovation boundaries.

The flying car company and its subsidiaries may continue making historic strides, with urban air taxi service potentially starting in 2028, offering growth potential.

Institutional investors show growing confidence in Joby Aviation, with a 30% rise in 13F holdings and a 94% increase in new positions.

A declining put/call ratio suggests reduced bearish sentiment. Despite a Q2 loss of $286 million for aircraft development, Joby remains financially robust with nearly $1.2 billion in cash and investments, supported by recent institutional backing.

Investors seeking potential long-term growth in an emerging industry might consider holding a small position in Joby Aviation, given its speculative upside. However, it’s important to manage your position size to minimize the risk of capital loss, as success in this niche market is uncertain.

On the date of publication, Chris MacDonald did not have (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.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.