There are some bargains in the market for investors interested in buying shares of flying car stocks. While the flying car industry is still in its infancy, several companies are making significant strides toward making this futuristic mode of transportation a reality. As with any emerging technology, there are risks involved. The potential rewards for early investors, however, could be substantial.
Some flying car stocks are riskier than others. Some brands are still in the research and development stage of their product life cycles or are exploring more experimental forms of propulsion that conservative firms are not. If these technological bets pay off, they could carve out powerful competitive advantages that others can’t match.
So, for this article, I’ve put together a list of three flying car stocks that I believe are pursuing high-risk, high-reward strategies for investors to consider. I recommend that only the boldest and risk-tolerant investors should consider these picks, as investing in these companies carry significant uncertainties.
Blade Air Mobility (BLDE)
Blade Air Mobility (NASDAQ:BLDE) is an urban air mobility company that operates short-distance aviation services.
The first thing to know about BLDE is that it’s a penny stock. At the time of writing, it trades around $4 per share and has a market cap of $297 million. This fact alone makes it suitable only for high-risk investors.
Another risk that BLDE takes is through some of the more adventurous investments it has made including a line into unconventional services. This is evidenced via its Trinity Organ Placement Services (TOPS), a new medical business line that helps transplant centers determine if an organ is a match for a potential recipient. BLDE is positioning itself to transport vital organs via medical teams, which could be a niche that flying cars could fulfill, given their rapid transportation capabilities.
However, on the positive front, BLDE’s short-term results have been impressive. In Q3 2023, the company saw jet segment revenue rise by 49.1% to $7.6 million compared to the previous year, driven by an increase in jet charter volume. Adjusted EBITDA improved significantly to $0.8 million from a loss of $4.5 million in the prior year.
Vertical Aerospace (EVTL)
Vertical Aerospace (NYSE:EVTL) is a British company developing electric vertical take-off and landing (eVTOL) aircraft for urban air mobility.
The key risk of investing in EVTL is that its eVTOL aircraft technology is still in the development stage. It has not been fully tested or certified by the FAA. Furthermore, even if the company were to reach certification, there are some scalability concerns. Producing eVTOLs is considerably complex and currently unsuitable for mass production.
Other risk factors are its stock price of 69 cents and market cap of $142 million. These factors imply that holding EVTL could be significantly volatile.
More pointedly, a delay in their program’s timeline has been particularly concerning, with the entry into service date for its aircraft now pushed back to 2026.
However, if EVTL is able to navigate these complex challenges, it could have an immense upside. Its tiny market cap and higher insider ownership of just under 70% are bullish signals and could easily surge in value, even on incremental developments.
Lilium (LILM)
Lilium (NASDAQ:LILM) is a German company developing an eVTOL jet. Its aircraft prototype features a unique design with 36 ducted electric fans.
LILM has a mixed outlook. In 2024, Lilium plans to achieve the first manned flight of the Lilium Jet by year-end.
However, the issue comes down to LILM’s aggressive rate of cash burn and lack of liquidity on its balance sheet. Although the company’s debt is minimal at $14.4 million, its negative cash flow for the past 12 months at $275 million far exceeds its balance sheet amount of $197 million in cash.
LILM understands its dire need for liquidity. It could be forced to continue issuing shares to stay in operation. However, over the past 12 months alone, shares outstanding have increased over 936%.
This, of course, is a massive risk for shareholders. Diluting their ownership while management offloads risk to them. This makes LILM a very high-risk flying car stock. Weigh those risks carefully before investing.
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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.
