Flying car stocks have great upside potential. And now could be a great time to purchase these shares. The broader indices still have the potential of a Santa Claus rally, moving closer to Christmas. So, the expectation is this momentum will continue into early 2024 and beyond.
The companies selected to take advantage of this rally are potentially undervalued. This can be seen by their low valuation ratios and their prospects for unlocking further growth for investors.
So let’s explore three flying car stocks for investors to consider buying.
Airbus (EADSY)
Airbus (OTCMKTS:EADSY) a major player in the aerospace sector, is actively exploring urban air mobility aircraft. They have been working on projects like CityAirbus and Vahana, which are electric vertical take-off and landing (eVTOL) aircraft.
The CityAirbus differs from others as it’s an all-electric, four-seat eVTOL design with an 80-km operational range.
Only a few announcements have surfaced over the years about these aircraft. So, we can surmise that they are still under heavy research and development. However, as the market looks to more established (and expensive) flying car stocks, investors opening a small position in EADSY stock while it’s still cheap could be a prudent option.
The current P/E ratio at 27.18 and the forward P/E at 21.28 suggest a valuation relative to its earnings. While a PEG Ratio of 1.51 indicates potential for growth relative to earnings growth.
Archer Aviation (ACHR)
Archer Aviation (NYSE:ACHR) is another flying car stock that investors should have on their radars.
The company is backed by investments from United Airlines and Stellantis. This could instill investor confidence since it is already in demand from the larger airlines and aviation companies.
However, the true value for ACHR lays in its valuation ratios, which currently look highly attractive. With a market cap of $2.02 billion and an enterprise value of $1.57 billion, the company shows a discrepancy between its market and intrinsic business values.
To me, this means that the market is pricing in expectation that its cash-generation ability will increase to help close the gap. Also, it gives a lift to its future stock price.
Additionally, the significant increase in share price by 220.57% over the past year, combined with a strong insider ownership of 26.21%, points to a bullish backdrop. And, many investors find that appealing.
Joby Aviation (JOBY)
Some analysts consider Joby Aviation (NYSE:JOBY) to be the blue-chip option for those who are comfortable with getting potentially lower returns in exchange for shares in a less speculative company.
So, why is JOBY ahead of other flying car stocks? The first reason is FAA certifications and the fact its stock price has more than doubled this year. Furthermore, recent collaborations, like the vertiport development in Japan with ANA Holdings, hint at expanding market reach.
Just like with ACHR stock, there’s a potential undervaluation in terms of its overall business worth to market cap. The company’s market cap stands at $4.78 billion, whereas its enterprise value is $3.70 billion.
Although the company is currently not cash flow positive, it has ample cash on its balance sheet to buy itself a runway to chart toward profitability. Hence, this makes it undervalued relative to its future earnings potential, as well as one of those flying car stocks to buy for 2024 and beyond.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
